Former Leeds chairman Gerald Krasner says Ken Bates' offer to pay off the club's creditors is "derisory".
Krasner and Bates during happier times at Elland Road
And Krasner has offered to represent the creditors free of charge to prevent chairman Bates retaining control.
Bates placed Leeds in administration this month and could get the go-ahead to buy the club back as director of a new company at a meeting on 1 June.
He has offered to settle the club's debts at 1p in the £1 and has the backing of the club's major creditors.
The creditors are owed a reported £22million.
But in a letter sent to creditors Krasner said: "Having now seen the papers in connection with the proposed CVA, it appears that Mr Bates' new company is proposing a dividend of 1p in the £1.
Quite frankly I consider this offer utterly derisory
"Effectively, he will have bought the club back debt free for approximately £500,000, including professional costs.
"Quite frankly I consider this offer utterly derisory and unless you agree with this proposal, it is up to you as a creditor to make your voice heard."
Krasner added: "I have had a lot of approaches recently from fellow professionals, acting either for creditors or for third parties, who wish to invest in the club, but do not want to deal with Mr Bates.
"They have all asked me the same question, 'What can be done?'
"My answer has always been that if the Company Voluntary Arrangement (CVA) proposal by the joint administrators is voted down, then I believe that substantial new investment would come quickly into the club and the return to creditors would be much higher."
Krasner, director of Leeds-based solicitors Bartfields, has stressed he has no financial interest in the matter, but is acting on behalf of a number of creditors who have already approached him.
Leeds went into administration with debts of £35million following a winding-up order issued by the Inland Revenue, who are owed £5million in unpaid taxes.
The business was, with administrators KPMG's approval, almost immediately bought by a new company, Leeds United Football Club Limited, of which Bates is a listed director.
But the sale is subject to approval by the club's creditors who will be furnished with full details of takeover plans put forward by other consortia at the meeting on June 1.