GEORGE REYNOLDS will not face legal action over the failure of Darlington Football Club directors to produce crucial financial records, The Northern Echo can reveal.

The administrators now running the club had asked Mr Reynolds and his boardroom colleagues for a statement of affairs on the club finances on January 5.

The deadline was extended to January 22 to allow for the Christmas holidays.

But the documents have still not been produced and administrators from Wilson Field have had to issue details to prospective buyers based on information they have gathered themselves.

Although the production of a statement of affairs is a legal obligation, no action is likely to be taken against former chairman Mr Reynolds or other directors.

Joint administrator David Field said: "As far as the other directors are concerned, they have not been involved in the day-to-day financial running of the company.

"We accept that they don't know enough to tell us, so that is the end of their responsibility.

"Mr Reynolds has had the main control of the financial side and we will mention in our report that he has not submitted a statement of affairs."

Mr Field said this was not a serious breach of regulations and would not normally warrant legal proceedings.

However, administrators have not ruled out action against Mr Reynolds for failing to comply with a legal agreement to meet any shortfalls incurred while the Quakers were in administration. Mr Reynolds has strongly denied signing any such guarantee.

A meeting of creditors last month heard that the club had debts in the region of £20m, including Mr Reynolds' claim for £14m, as well as £4m outstanding in mortgage loans secured on the Reynolds Arena.

Yesterday, Mr Field acknowledged that Mr Reynolds could make a bid to return to the club, despite concerns over the alleged broken promise.

"I am aware that Mr Reynolds is wanting to, for want of a better phrase, buy it back," he said.

"I wouldn't be at all surprised if he wanted to do something, whether himself or through someone else."

Administrators are working on the assumption that creditors will accept 10p for every £1 that they are owed.

But Mr Reynolds told a national newspaper at the weekend that he was not prepared to walk away with just a tenth of what he had put in.

On paper, he is the biggest creditor. The last set of accounts, in April 2002, showed that Mr Reynolds had loaned about £5.5m to the club, but since that time his claim has risen to £14m.

The administrators have not yet verified the validity of the claim, but if it is confirmed, it would mean Mr Reynolds has a potential veto on any proposal put forward to creditors.

A voluntary arrangement has to be approved by the holders of 75 per cent of the debts. And Mr Field said: "On paper, what Mr Reynolds says is what will happen.