Mendy is claiming £11.5 million in unpaid wages by the Premier League champions, who stopped paying him after he was charged with rape and sexual assault in 2021.
The ex-France international was found not guilty of six counts of rape and one count of sexual assault in January 2023, but the same jury could not reach a verdict on another count of rape and one count of attempted rape.
After a retrial, Mendy was found not guilty of both charges.
Mendy, who joined City from Monaco for a reported £52 million in 2017, was released by the club in June 2023 following the expiry of his contract.
Court documents shared with the Manchester employment tribunal said Mendy "very quickly ran out of money" and had to sell his Cheshire mansion to cover legal fees, bills and child support payments after his wages were withheld.
"I struggled to pay my child support, I felt awful," the footballer said in a witness statement.
"Raheem Sterling, Bernardo Silva and Riyad Mahrez all lent me money to help me try and pay my legal fees and support my family."
Mendy, who now plays for French Ligue 2 club Lorient, claimed to have been assured by a senior City official he would receive his unpaid wages once he had been cleared of the charges.
The club continued paying Mendy's £500,000 a month salary following his first arrest in November 2020, but argued they did not have to after he was charged because of his bail conditions and a Football Association suspension meant he was not able to perform his duties as a player.
"At no point have Manchester City apologised to me or even acknowledged how their actions almost cost me everything," added Mendy's witness statement.
"I believe that it is fair and just for me to be paid the wages that I would have earned but for being falsely arrested for crimes that I did not commit."
The employment tribunal is expected to last for two days.
