Leicester City have confirmed they are legally challenging a Football League charge of breaching Financial Fair Play (FFP) rules in 2014.
It came as the Premier League champions released their financial results for 2015-16 on Thursday and declared a pre-tax profit of £16.4m to 31 May.
City said they were confident the FFP charge would be dropped.
The Foxes exceeded the permitted £8m loss when they won the Championship in the 2013-14 season.
The club posted a loss of £20.8m but said £13m of it was "allowable" as it included costs relating to the club's promotion and academy expenditure.
The Football League said the case was "ongoing".
The Foxes moved out of the bottom three on Monday after a 3-1 win over Liverpool, their first game following the sacking of manager Claudio Ranieri, who led them to the title nine months ago.
A Leicester statement said: "The club has entered into an arbitration process with the Football League in relation to the legality of the 2012 Championship FFP rules.
"Provision has been made for legal costs in relation to this process however the directors are confident that no further liability will be incurred by the company."
In 2012, after two years of detailed discussions, the Football League and its clubs agreed on a FFP framework across all three of its divisions.
Queens Park Rangers challenged "the legality" of the rules in May 2015 as they faced a fine of up to £58m.
And the following year it was confirmed Bournemouth had been fined £7.6m for breaching FFP rules in their 2014-15 promotion-winning season.
In September 2016, Football League chief executive Shaun Harvey said the organisation may be in a position to clarify the situation within a couple of months, but no announcement has been made.
Leicester's turnover in their title-winning season rose to £128.7m, with their wage bill rising from £49.08m to £68.77m.