Portsmouth have had their winding-up order over an unpaid tax bill to HM Revenue and Customs adjourned for another week.
The club now has until 1600 GMT on 17 February to file a “statement of financial affairs” proving it will be able to pay its creditors.
Her Majesty’s Revenue and Customs had taken Portsmouth to court over an unpaid tax bill amounting to £7.4m.
If Pompey file the statement, the earliest the case could return to the High Court is Friday 19 February.
Court registrar Christine Derrett said she feared the company would continue to trade and accumulate increased debts that would not be paid.
“I am very concerned about the financial status of this company,” she said. “It seems to me there’s a very real risk that this company is undoubtedly trading while it is insolvent.
“I’m obviously conscious that, by making a winding-up order, it would have very severe consequences not only for the company as a business but for the supporters themselves, but that’s not a consideration that I strictly take into account.”
Portsmouth faces a VAT bill of £7.4m which it is disputing with HMRC. It also owes £4.7m in unpaid PAYE and National Insurance which were not part of the court petition on Wednesday.
Gregory Mitchell QC, who represented HMRC, said: “It’s quite clear, beyond any doubt at all, that this company is insolvent.
“They have failed to provide any evidence at all as to their solvency. There are many debts and they are unpaid.”
Representing the club, Nigel Hood said new owner Balram Chainrai would run the company until it was financially stable and then sell it on to someone who wanted to “operate the business as a football club”.
He said any move to force the club to wind up would have “very serious consequences”.
“There would be irreparable harm caused not only to the suppliers but to the employees, 600 staff, suppliers, people who have paid in advance for their season tickets would lose their money,” he said.