Hearts FC have given up the battle to stay afloat and are calling in administrators.
The club confirmed this afternoon it has lodged papers at the Court of Session in Edinburgh and accountancy firm KPMG were later appointed to act as their administrators.
The club confirmed this afternoon it has lodged papers at the Court of Session in Edinburgh and accountancy firm KPMG were later appointed to act as their administrators.
Blair Nimmo, Head of Restructuring at KPMG in Scotland said: "We have been nominated by the club’s directors as potential administrators of Heart of Midlothian plc.
“"We appreciate the huge interest this notice will attract but at this stage we are not in a position to offer any further comment. We will retain this position until such time that the club is placed into administration and on the condition that we are formally appointed.”
A number of the club's creditors have been informed of the latest developments and sources close to Hearts expect a hearing to take place within the "next couple of days".
The club was faced with a winding-up order last week after Her Majesty's Revenue and Customs threatened action over an unpaid £100,000 tax bill, although the majority of that sum has been paid.
The club are now likely to face a 15-point penalty when the new SPL season kicks off on Saturday, August 3.
Top-flight rules state any club suffering an insolvency event will be stripped of 10 points or a third of their previous season's tally, whichever is the greater.
Hearts finished the 2012/13 campaign in 10th place with 45 points.
Last Friday, the club were hit with an immediate transfer embargo by the Scottish Premier League after admitting they could not afford to pay their players.
The news came just 24 hours after the Gorgie board released a statement saying they had entered a "critical" stage in their battle to pay off debts of £25million as well as financing tax and running costs.
The entire Jambos squad was put up for sale in a desperate bid to raise the reported £500,000 needed to see the club through to the start of the new season.
Politician Ian Murray is leading the Foundation of Hearts supporters' group who hope to buy the club, with a formal bid expected to be lodged by the end of the month.
But the Labour man admits that the current situation at UBIG - which owns a 50 per cent stake in the club - and 29.9 per cent shareholder Ukio Bankas has "muddied the waters".
Both firms were formerly controlled by club Vladimir Romanov but are now in the midst of being declared insolvent by Kaunas-based authorities.
Ukio Bankas - which lost an appeal against liquidation on Wednesday - is due £15million by Hearts, who also owe another £10million to UBIG.
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