Raith Rovers investor and director of football Claude Anelka is considering his position following the resignation of chairman Turnbull Hutton.
Turmoil has followed the arrival of Claude Anelka
And BBC Sport also understands that Gordon Dalziel has become front runner to become the club's new manager.
The club said Hutton had left due to "a breakdown in personal relationships".
Club secretary Eric Drysdale insisted: "It is a direct consequence of recent board decisions being constantly changed or undermined from within."
Anelka, the brother of Manchester City striker Nicolas, had last month been forced to relinquish control of the team after a disastrous start to the season that has left Raith stranded at the foot of Scottish Division One.
But the Frenchman, who had taken control in the summer in return for a large financial investment, was given a place on the board and a director of football role.
Drysdale's statement said that Hutton had now resigned as chairman and director because personal relationships had broken down due to board decisions being challenged.
"It should be made absolutely clear at the outset that this resignation has nothing whatsoever to do with any alleged betting scandals, selection of the head coach, or the present dissatisfaction of the fan base," he said.
"Turnbull fully acknowledges and applauds the commitment and support of the 'back office' and ground staff who continue to work selflessly for the good of the club and wishes them, and the club, well for the future."
Hutton heads a group that owns Rovers' Stark's Park in Kirkcaldy.
"Turnbull retains a significant financial stake in both West City Developments and Raith Rovers FC," pointed out Drysdale.
"It is unclear at this time as to whether or not this will be an ongoing arrangement."
Hutton had publicly backed the application by former Alloa Athletic manager Terry Christie.
But others on the board wanted former Rovers players Dalziel, formerly of Ayr United, or Paul Smith, who was last week sacked by Berwick Rangers.
All three had been interviewed for the post this week.
Former Rovers player Shaun Dennis is presently acting as caretaker.
Anelka's arrival had led to the immediate departure of former player-manager Antonio Calderon, who refused to work under him.
The Frenchman, with little previous coaching experience, took over as manager of the team and Calderon's assistant, David Martin, was next to leave the club.
Anelka brought in John Hollins to replace Martin, but the former Chelsea manager resigned last month citing differences of opinion with the Frenchman.
However, poor results and fan protests led to Anelka standing down to allow a search for a new manager.