Keegan could be awarded more than £9m if he successfully argues his case for constructive dismissal.
Ashley claims it would have major financial implications for the club, with administration the most drastic choice of options.
Keegan's claim, which is being heard by a Premier League independent arbitration panel, is expected to reach a conclusion today.
Should Ashley choose administration, the Magpies would lose 10 Coca-Cola Championship points, a penalty which would scupper their efforts to drag themselves back into the Barclays Premier League at the first attempt.