The Sports Direct boss Mike Ashley has threatened legal action to remove Debenhams’ administrators after his stake in the department store group was wiped out and the company put into the hands of its lenders.

Debenhams’ listed holding company entered pre-pack administration on Tuesday, rendering shareholders’ investments, including Sports Direct’s near-30% stake, worthless.

The retailer’s 165 UK outlets continue to trade via a new company owned by its banks and bondholders in return for reducing the company’s debt pile, which had topped £600m.

In a letter to FTI Consulting, whose executives were appointed joint administrators of Debenhams, Sports Direct’s lawyers called for the insolvency process to be reversed or face “further action”.

The letter, seen by the Guardian, stated: “[Sports Direct] will do everything available to it to unwind the damage caused to the company and other stakeholders (including large and small shareholders) by the events of today including but not limited to challenging the appointment [of FTI as administrators] and all consequences of it.”

The lawyer’s letter makes clear that Sports Direct reserves the right to apply to the courts for FTI’s “removal as administrators of [Debenhams] on the grounds that you are, inter alia, conflicted and unable (at a very minimum) to independently perform your duties of investigation”.

It said FTI had been heavily involved with Debenhams since at least 8 February having been engaged by the group’s lenders. It said FTI was conflicted because it had sold the retailer’s operating companies to those same lenders via a deal arranged prior to its administration.

Part of an administrator’s duty is to investigate events leading up to its appointment. The letter, which was sent by Sports Direct’s law firm, RPC, said FTI was unable to do so independently.

It added Debenhams had gone into administration only because Sports Direct’s rescue plans, which included an offer to underwrite a £200m shareholder fundraising, had not been engaged with.

Lenders turned down Ashley’s various suggestions because they all involved him being made chief executive of Debenhams.

Caroline Sumner, technical director at R3, the business recovery trade body, said a legal challenge of administrators’ conduct in the high court was extremely rare but had been tried before in specific circumstances.

She said that if a court deemed that an administrator’s actions had been unfair to even one creditor, it could make an order demanding appropriate action to remedy that. But such action was unlikely to include unwinding a pre-pack deal, she added.

“Usually shareholders understand there are no other options and administrators have looked at them all,” Sumner said. “Mike Ashley is a bit different.”

Debenhams’ joint administrators at FTI said they were “entirely satisfied that the sale was in the best interests of the company and its creditors”. They added that Sports Direct had been invited to participate in a sale process that had been launched since the company went into administration.

“We are officers of the court and have a duty to act in the best interest of Debenhams plc and its creditors. We strongly refute our actions in undertaking a sale for the benefit of the company’s creditors were subject to any conflict of interest,” they said in a statement.

“We understand that Sports Direct as a shareholder will be disappointed that there is no value in the equity. However, the transaction delivers continuity for all group operations and was in the best interests of the group’s creditors, employees, customers, pension holders and suppliers.”

The Sports Direct chief executive was keen to put Debenhams together with House of Fraser, the department store group he bought out of administration for £90m last year.

Ashley also wanted to protect his £150m investment in Debenhams, which had a market value of more than £300m less than a year ago but whose shares were rendered virtually worthless as a result of the administration..