Palace chairman Simon Jordan is to sue Iain Dowie after his former manager was announced as the new boss of Charlton Athletic.
Jordan released Dowie from his contract last week because he understood the 41-year-old former Oldham boss wanted to return to the north to be nearer his family.
However, he has now moved to one of Palace's closest neighbours – leading Jordan to have Dowie served with a writ during today's press conference at the Valley.
The legal action accuses Dowie of having made "fraudulent statements about his reasons for leaving the club."
Dowie's contract with Palace included a clause which entitled the Eagles to £1m in compensation should the manager leave for another club. Jordan says he only waived this clause because of the reasons Dowie gave for leaving.
"There is a law in this country called misrepresentation and Iain has breached it and now he can understand the reality of what that means," Jordan told Sky Sports News.
"He obtained a release from his contract by misrepresenting his position. The sole reason why Iain Dowie was released from his Crystal Palace conract is because he told me he wanted to go to the north.
"I am acting in the interests of my football club and also in the interests of decency and integrity and I know what transpired."