No you can start a team at that level subject to FA approval, there are always teams folding that far down.
There is a high likelihood the FA would look favourably on a Coventry phoenix club if they had no other professional club...
No he was released because he is a crock and does not look after himself adequately.
Andy Turner has gone to press on it, good clickbait as they say.
http://www.coventrytelegraph.net/sport/football/telegraph-fell-foul-former-coventry-11939736