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Hearts enter administration

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Hearts have served notice of their intention to appoint an administrator. The Edinburgh club have debts of £25m - owed to Lithuanian-based companies formerly owned by Vladimir Romanov - who are themselves facing insolvency.

Last week, the entire Tynecastle squad was put up for sale, with Hearts seeking £500,000 to keep them running over the summer. It means Hearts will start next season in the top flight with a deduction of 15 points. Hearts owe £15m to Ukio Bankas, which has been declared bankrupt.

A dramatic fall in season- ticket sales contributed to a severe cashflow problem that resulted in the wage bill not being paid in full last Friday and only half of a £104,000 tax bill being met. The latter had prompted Her Majesty's Revenue and Customs to threaten a winding up order.

Hearts had hoped that an uplift in season-ticket sales, or even advance selling tickets for individual matches once the fixtures are published, would raise enough money to meet their commitments. However, the VAT bill on the season tickets already sold is due at the end of the month – thought to be a seven figure sum – while another PAYE bill is also due at the same time.

The liquidator of the Lithuanian bank can sell the 29.9% shareholding it has in Hearts as well as Tynecastle Stadium, which was held as security for the debt. In addition, another £10m is due to the club's parent company, UBIG - which has close to 50% of the shares and is claiming insolvency. Both companies were once controlled by Romanov, who first invested in Hearts in 2005.

At least six parties have expressed an interest in a potential takeover but with ownership of the club so complicated it has hindered any development. The Foundation of Hearts, a coalition of fans groups, is thought most likely to succeed if it can raise the necessary finance.