Arena Coventry Limited (ACL) has announced it has made an application to the High Court in London to request that it make an administration order against the club.
The Sky Blues' owner, the hedge fund Sisu, is disputing the terms of the lease but the League One club would face a 10-point deduction by the Football League if they are placed into administration.
ACL is the Coventry City Council and Higgs Charity-owned company that runs the Ricoh Arena stadium and its chairman Nicholas Carter said: "It is highly unfortunate that we have had to take this course of legal action. Had we not taken this action, then the alternative might have been catastrophic for CCFC.
"We are owed a considerable amount of money in rent arrears. While it is imperative that ACL takes action to recover these arrears and to stop the arrears growing, it is important for us to find a solution that can provide for the survival of the Sky Blues. Hopefully this action will ultimately put CCFC on a stable financial footing for the future.
"Following recent statements in the media from the CCFC's owners threatening the Club with liquidation, we are keen to stop this from happening. Our action prevents Sisu simply closing CCFC and walking away from the situation.
"We are, of course, well aware that under the current Football League regulations, CCFC will face a points deduction and we will do everything we can to ensure that the case is heard by the High Court before the end of the current season. While this opens up the possibility of a 10-point deduction this season, the board believes this is better than leaving CCFC facing a much larger deduction at the start of next season."
In the next few weeks, the High Court will decide whether the club is fit to continue trading. If it decides it is not, it will be placed into administration and an administrator appointed to sell it.