Jimmy Nicholl of Raith Rovers was appointed as McCarthy's replacement, but could not reverse the slump in form which saw Millwall relegated at the end of the 1995–96 season in 22nd place. Just five months earlier they had been top of Division One, but now Millwall found themselves in the third tier for the 1996–97 season. The club experienced severe financial difficulties that resulted in them being placed in financial administration for a short time. Nicholl was relieved of his duties and John Docherty returned on a short-term basis to stabilise the club.