Four members of UB40 have been declared bankrupt.
If bankruptcy proceedings are issued following this hearing today, the band will vigorously oppose them.
Brian Travers, Jimmy Brown, Terence Oswald - known to fans as Astro - and Norman Hassan have been listed by Britain's Insolvency Service following a declaration in Birmingham County Court, and could now have property seized by tax officers to pay off any outstanding debts.
The case - which revolves around the failure of the band's record label and management company DEP International - and in July, the quartet were warned they would have to pay costs on the court case, which have already ran to tens of thousands of pounds.
At the time, they vowed to fight bankruptcy and their spokesperson said: "If bankruptcy proceedings are issued following this hearing today, the band will vigorously oppose them."
The news comes after the 'Red Red Wine' hitmakers played a special show at the Hare and Hounds pub in King's Heath, Birmingham, to mark being bestowed with a Performing Rights Society plaque, honouring their first ever show, held there in 1978.
In 2008, frontman Ali Campbell quit the group - who have sold over 70 million records - because of ongoing wrangles over their finances, and he was not invited to join the show.
His spokesperson said: "It is ironic that the very week they celebrate their first gig they have been declared bankrupt, after administration began in 2006, vindicating both Ali and Mickey Virtue's decision to leave UB40.
"Ali did not personally receive an invitation to the Hare & Hounds show and, as such, did not turn it down. He most definitely would have liked to have been invited as it is where the journey began and Ali is proud of the fact that UB40's music has been honoured."
Robin Campbell - Ali's brother and another founder member - was also involved in the Birmingham County Court case, although he is not listed as bankrupt.