Fenty told BBC Radio Humberside: "We've failed to agree terms with Russell so we're left in a situation where that contract is null and void.
"We've asked Russell put forward what does he want. We want him to tell us so we can make a decision about who is going to be the new manager."
Fenty added: "We only have one cake that we can cut.
"We can only go so far in terms of budgets for different departments and we are not prepared to break the basis that we've been building the club on."