Former Darlington FC Chairman George Reynolds has been disqualified from holding company directorships for eight years, following the collapse of one of his former businesses. The Northern Echo reports.

IN the decades before he emerged into the national media spotlight as the saviour of Darlington Football Club, George Reynolds was making his name in the somewhat less glamorous world of kitchen worktops.

In the 1960s, from a base in Shildon, County Durham, the would-be entrepreneur set about taking on the industry's big names.

His policy was simple - going about the business in the opposite way to everybody else and undercutting his competitors to make money.

In his biography, Cracked It!, Mr Reynolds described how he sat down with the managers at the newly formed Direct Worktops to outline his plans.

He said: "We are going to do this the complete opposite of everyone else.

"They use rubber rollers on the line, we'll use stainless steel; they shrink-wrap off-line, we'll shrink-wrap on-line; they have sales reps, we won't have any sales reps; most don't offer post-formed tops, we'll manufacture nothing but post-formed tops; they give 90 days' credit, we'll give one month."

It was the start of an empire that grew to the extent that, only a few years ago, Mr Reynolds found himself in a lofty position in The Sunday Times Rich List.

But, when it came, the decline of the business was as swift as it was complex.

George Reynolds UK Ltd (GRUK), initially known as Direct Worktops, traded successfully until 1998, when the worktop division was sold to US business Wilsonart for £43m, and the company continued to manufacture chipboard.

In February 2002, the chipboard division was sold to Vertex Panel Products, based in Bolton. The deal involved Vertex paying £6.5m in instalments over five years.

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

In October that year, GRUK entered into a company voluntary arrangement (CVA) with its creditors.

A CVA 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 deal with Vertex would have allowed that 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 GRUK was presented to the Manchester District Registry on February 21, 2003.

The company failed with debts of £3,402,468. The Official Receiver called in the Insolvency Service to investigate the directors' conduct in the days running up to the collapse.

It found that:

* Despite "gross losses" at GRUK, George Reynolds used its money to invest £8,048,933 in two of his other businesses -Darlington FC and Justwood. The report concluded: "These investments... were made imprudently, or irresponsibly, or with little or no commercial justification."

* Mr Reynolds and his fellow directors failed to ensure that GRUK kept proper records. This resulted in uncertainty over who owned assets worth £588,733.

* The directors sold GRUK without ensuring they had got the best price, particularly in respect of the value of the land.

* They also failed to ensure security was in place if Vertex was unable to pay.

* These lapses lost £1m on the land deal and more than £6m in respect of other assets when Vertex failed.

* Mr Reynolds also tried to ensure a better deal for himself by doing a deal that meant he would receive £1m ahead of any creditors.

It was all a far cry from the days when he was hailed as Britain's best boss, when key workers drove Mercedes cars and a handful of others had their mortgage payments paid.

Mr Reynolds still maintains that he lost millions in the Vertex deal and that he was trying to hand the company on, but that will be cold comfort to GRUK's creditors, many of whom were small businesses that could ill afford to lose large amounts.

Vertex was sold to a new company, Masistar, created 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 in April 2003.

The sorting out of Vertex's affairs is still in the hands of liquidator Deloitte and Touche, with creditors eagerly awaiting the outcome.

Mr Reynolds was questioned about the GRUK saga at Teesside Crown Court in January last year, and told the public examination hearing that he did not have a head for figures or dates, and could not remember making key decisions while at the helm.

For the next eight years, he will not have to suffer that responsibility at the helm of a limited company.