Cork City Football Club is thought to be considering an application to the High Court for examinership to prevent it from going into receivership.
The current FAI Cup holders are believed to have debts of more than €800,000.
One of the best supported clubs in the League of Ireland, the club requires immediate investment if it is to continue to trade.
Less than two weeks ago, the Cork players failed to get paid on time ahead of a top of the table clash with Bohemians.
However it is understood that all current staff are now paid up to date.
The club is now preparing an application to the High Court for examinership.
Former Chairman Brian Lennox, who sold Cork City to venture capital firm Arkaga in 2007, resigned as a director last night.
CCFC is one of a number of League of Ireland clubs to experience severe financial difficulties this season, among them Galway United, Sligo Rovers and Cobh Ramblers.
The fate of several other Premier and First Division clubs hangs in the balance and is a considerable cause of concern to the FAI which took over the running of the league in 2007.
A statement from CCFC this afternoon said it had been engaged in negotiations with potential new investors for the last number of weeks.
It is too early to speculate on the outcome of these discussions which are still ongoing, the statement says, adding that the board will meet next week and come to a decision on the club's future.
'Some of the figures currently being reported today, particularly in relation to the wages of players and staff, are inaccurate and grossly inflated,' the statement says.
'Because of the sensitive nature of the ongoing discussions it would be inappropriate for Cork City Football Club to make any further comment at this time,' it adds.
