A BUSINESSMAN at the centre of a row over ownership of one of the North-East's most important historic buildings is facing bankruptcy proceedings over a previous business deal, The Northern Echo can reveal.

A bankruptcy petition has been issued against Garry Moat by liquidators of Sumlock Electronics (North East) Ltd - a company Mr Moat and wife Joanne had interests in which collapsed in 2012 with debts of £3.2m.

A hearing is scheduled to take place at Newcastle County Court later this month with the liquidators hoping to recover more than £200,000.

The legal action comes as a dispute between Mr Moat, from Corbridge, and William Davenport, the owner of Windlestone Hall, near Newton Aycliffe, continues over a bid by Mr Moat to buy the historic property.

Mr Moat says he is the legal owner of the land surrounding the hall after completing the purchase in December last year.

This claim is disputed by Mr Davenport, who lives in the property.

He claims the sale process was flawed and has complained to the Solicitors Regulation Authority (SRA) about the handling of the transaction by Mr Moat's solicitors, Newcastle-based Sintons LLP.

Commenting on the bankruptcy proceedings, Tim Gray, partner at Sintons, said Mr Moat was unaware of the bankruptcy petition until notified by The Northern Echo.

He said his client had entered into an agreement to pay the money due in instalments.

He added: "In the spring of this year, Mr Moat commenced negotiations to make accelerated payment of the sums due under that agreement.

"Those negotiations were, as far as Mr Moat was concerned, ongoing and he was shocked to discover from (The Northern Echo) that the liquidators had petitioned for his bankruptcy."

Mr Gray said his client had since contacted the liquidators and it was expected an agreement would be reached shortly to pay the outstanding amount.

Responding to the complaint to the SRA, Mr Gray said it was based on "spurious" information.

He added: "Mr Davenport is not my client. He is not the sort of person that this firm would want as a client.

"I tried to assist him when he was obviously in dire financial need and wanted to come and sign documents urgently."

Last month, men working for Mr Moat cut down and removed a locked barrier on a lane to Windlestone Hall.

Mr Davenport called Durham Police claiming the barrier had been "vandalised and stolen", however it is understood officers advised him it is a civil matter.

The SRA said it could not comment on individual complaints.

Mr Moat is currently on bail after being arrested in connection with a Northumbria Police investigation into an alleged telecoms fraud involving Sumlock and other companies.