Debenhams has won approval for a plan that deals with £200million of its debt and could wipe out existing shareholders - including Sports Direct's Mike Ashley.
The department store said on Thursday it has won consent from the majority of its lenders, meaning it can go ahead with a restructuring plan to "secure the future of the business".
Debenhams is now expected to look at a debt-for-equity swap and a pre-pack administration, with the latter expected to be more likely as it does not require shareholder approval.
But either scheme would wipe out existing shareholders along with dealing with the outstanding debts.
Current shareholders include Ashley, who controls just under 30% of the store. He himself launched a rival plan to take control and install himself as chief executive.
The plan would see Sports Direct acquire the shares it doesn't already own for about 5p each.
New Debenhams boardroom war as Sports Direct launch bid to make Mike Ashley CEO
In a statement late on Tuesday evening, Chris Wootton, deputy finance chief at Sports Direct, said: "Debenhams shareholders, both major and minority, are sick and tired of being ignored, cast aside and trampled underfoot by the lenders of Debenhams who, through the incompetence or, worse, collusion of the board, are allowing these critical stakeholders in the business to be wiped out. This is the shareholders' chance to fight back.
"We reiterate our prior comments that we will leave no stone unturned in pursuing those responsible for this long-planned theft."
Debenhams has said it will give any firm takeover offer from Ashley's Sports Direct "due consideration" but added that it would not solve its mounting funding crisis.
It said that, given the "timetable associated with any public offer", a bid from Sports Direct would not address its immediate financing needs.
As part of the condition of the Sports Direct proposed offer, Ashley would be immediately installed as chief executive of the ailing high street firm.
Business tycoon Mike Ashley's shock bid to run struggling Debenhams
He already ousted former chairman Sir Ian Cheshire from the company in January by teaming up with fellow shareholder Landmark to vote against his re-election.
Chief executive Sergio Bucher was also removed as a director but has remained in his post for the time being.
Ashley had also offered Debenhams a loan, which it said would be considered.
Debenhams said last week that it was in talks with lenders to secure a new loan, part of which will pay down a bridging loan that it announced in February.
Debenhams has said it will give any firm takeover offer from Ashley's Sports Direct "due consideration" but added that it would not solve its mounting funding crisis.
But it added that, given the "timetable associated with any public offer", a bid from Sports Direct would not address its immediate financing needs.
