Watford have made an official complaint against Everton to the Premier League over the alleged tapping up of their former manager Marco Silva.
Sky Sports News understands that, to date, all efforts to find a solution to the highly acrimonious dispute have failed.
A mediation meeting last month between the two clubs - and instigated by the Premier League - failed to resolve the issue.
The league remains keen for its member clubs to sort out their differences. However, with the dispute now in its fourth month, the league may be forced to convene a commission to find a suitable conclusion.
In theory, that panel could impose a wide range of sanctions, from fines through to a points deduction.
However, Sky Sports News understands the most likely scenario would see a suitable compensation figure reached for Everton to pay.
Watford remain furious over repeated attempts to unsettle Silva over a two-month period during the first half of the campaign, culminating in an offer of compensation from Everton of £12m.
Despite Silva's obvious interest in a move to Merseyside, Watford refused to let Everton speak to him. A dramatic loss of form was to lead to Silva's dismissal in January, following a run of one win in 11 matches.
"The club is convinced the appointment of Silva was the right one and had it not been for the unwarranted approach by a Premier League rival for his services we would have continued to prosper under his leadership," the club said in a statement.
Instead of appointing Silva, Everton signed Sam Allardyce as Ronald Koeman's replacement - and on Wednesday morning, Sky Sports News understands he will meet Farhad Moshiri to end his six months at the club.
Ironically, Marco Silva remains Everton's preferred candidate to replace the former England manager.