GEORGE Reynolds is to appear in court to face a public examination after one of his businesses went into liquidation with debts of £4.7m.

Mr Reynolds, who is chairman of Darlington Football Club, will appear at the town's county court on September 22.

He will be accompanied by Richard Tennick who is a fellow director of George Reynolds UK (GRUK).

The hearing has been called by the Official Receiver appointed when GRUK went into liquidation.

A statement released last night by the Official Receiver said: "Under Section 133 of the Insolvency Act 1986, the Official Receiver may examine a director of a company in compulsory liquidation in open court before a judge and under oath.

"This is done to obtain information on the company and its affairs where there has been little or no co-operation from a director or where it may be appropriate to obtain further information by way of formal examination.

"Mr Reynolds has provided some information to the Official Receiver but further information has been sought which he has yet to provide.

"Mr Tennick has yet to cooperate in the proceedings. The Official Receiver has therefore applied to the court for both to be examined publicly."

Yesterday, Mr Reynolds said he had met the Official Receiver and had insisted on the public examination himself.

The Quakers chairman said: "There is an inquiry and I am absolutely delighted, I welcome it with open arms.

"I ran that company successfully for 21 years, I sold it and then it changed hands three times."

Creditors of the company met in Darlington this week to discuss progress with liquidators Deloitte and Touche.

Documents produced by Deloitte and Touche show that GRUK owes creditors £4.7m.

Officials from the chartered accountants say they have been working on the case for some time but warned last night that it could take months, or even years, to complete. Deloitte and Touche is also examining the relationship between GRUK and Darlington Football Club.

However, Mr Reynolds maintained: "I sat down and accounted for every penny of where the football club's money has come from. The fact is that no money came out of George Reynolds UK into the football club."

He added: "The sad thing about the situation is all the lads who lost their jobs. There were good lads among them and they're all wishing I was back. One thing is for definite - I've not been the bad guy in this one."

GRUK's chipboard manufacturing business in Shildon, County Durham, was sold to Vertex Panel Products in February 2002. Under the deal Vertex agreed to pay £6.5m in installments over five years.

At the same time Vertex also purchased property from another company - George Reynolds Holdings - for £2.65m. It paid £2.2m with the rest to be paid at a later date.

In October, GRUK entered into a Company Voluntary Arrangement with its creditors.

A voluntary arrangement is an agreement between a company and its creditors under which the company can continue trading while it pays off all or some of its debts with the formal consent of the creditors.

The Vertex deal would have allowed this to happen, but on December 18, Vertex went into administration and could no longer meet its contractual requirements.

Following the failure of the voluntary arrangement, a petition to compulsorily wind up George Reynolds UK was presented to the Manchester District Registry on February 21, 2003.

The county court examination is part of this winding up process.

The Official Receiver has a statutory duty to investigate a company in liquidation and to look at the causes of why it has failed.

Vertex was sold to a new company Masistar, formed by former Vertex directors, for £486,750.

But within two months, Masistar had gone into receivership. The majority of its assets were sold to Egger (UK) Ltd for £4.1m this April.