Former Bundesliga champions 1860 München will have to file for insolvency but that will offer the club a big chance to bounce back strongly, club president Gernot Mang said on Sunday.

The club has been demoted into the fourth division because it could meet licensing obligations for the third tier after investor Hasan Ismaik cancelled a promised loan.

The club then decided to end its cooperation with Ismaik which he is challenging with his legal team, while 1860 are appealing their demotion at the German Football Federation (DFB).

Mang meanwhile told the club assembly on Sunday that “as things stand, the KGaA [football division] will have to file for insolvency next week.”

He blamed Ismaik’s actions, saying he had, for example, insisted on bringing in another investor whose identity was kept secret and whose source of funds was unknown. However, as voluntary supervisory board members are personally liable – for example, in the event of money laundering offences – the club had no choice but to refuse.

The club was a founding member of the Bundesliga in 1963 and won the title in 1966. They also have two German Cup titles and played in the European Cup Winners' Cup final in 1965.

But 1860 have not played in the top flight since 2004 and had been in the third tier since 2018.

Jordanian businessman Ismaik has always been controversial since he started investing into the club in 2011.

Mang said the new situation offers "the greatest opportunity for TSV 1860 Munich in many, many years. We have a unique opportunity to take the future of our club into our own hands.”

He said there would be more clarity in a fortnight, that they will talk to the players and then "build a strong team that does this club justice on the pitch."