Rangers face having to pay out £1.6m over their withdrawal from the Sydney Super Cup tournament amid a fan backlash.
Reports from Australia state that organisers have accused the club of breaking a binding agreement to take part, costing them a loss in ticket sales and promotion.
The Ibrox club initially announced they would be taking part alongside Celtic, with the Glasgow rivals set for their first ever meeting outside Scotland.
But supporters quickly voiced their disapproval of the move with some completely against playing the Hoops in a “friendly match” and others concerned Rangers would be playing a support act in a tournament billed as Ange Postecoglou’s homecoming.
The use of the term “Old Firm” was also a contentious issue, with Rangers using the moniker in their initial announcement but Celtic failing to do so.
Rangers eventually withdrew and were replaced by English Premier League club Everton.
Australia’s Daily Telegraph reported on Tuesday that organisers have now launched legal action over the withdrawal.
Promoters claim they suffered loss and damage following the “wrongful termination” as funding was reduced by £840,000, with a loss of ticket sales also blamed on Rangers withdrawal.
Celtic took part in the tournament earlier this month with a 2-1 loss to Sydney FC followed by a penalty shootout defeat to Everton.