GEORGE REYNOLDS is facing a bankruptcy hearing after the financiers who loaned £4m to Darlington Football Club launched legal action against him, The Northern Echo can reveal.

The Sterling Consortium, the finance group that holds a mortgage on the Reynolds Arena, has petitioned to have the former Quakers' chairman made bankrupt.

A statutory demand is understood to have been served on Mr Reynolds on January 22, just under a month after cash-strapped Darlington went into administration. A bankruptcy petition was issued on February 26.

Durham County Court confirmed yesterday that the hearing would take place on Wednesday, April 14, before District Judge Marley.

Sterling loaned money to the Quakers, at an interest rate of 15 per cent, to finish work on the stadium. The group declined to comment on the bankruptcy hearing last night.

The hearing is the latest blow for Mr Reynolds - who once claimed he had a personal fortune of £247m and was almost as rich as the Queen.

After saving Darlington Football Club from disaster in 1999 and masterminding a move to a stadium on the edge of town, he was forced to place the club in administration to avoid a winding-up order. Shortly afterwards, he stepped down as chairman and director.

Since then he has been waiting to hear if a rescue deal could be found to save the club.

Mr Reynolds is the Quakers' largest unsecured creditor. He claims he is owed almost £20m, although the last available accounts for 2002 only reveal a debt of £5.6m. If he is declared bankrupt, however, Mr Reynolds would find his property and assets at risk.

A bankruptcy hearing also has the option to dismiss the petition, suspend the proceedings pending further information, or refer the case to an insolvency practitioner to set up an individual voluntary arrangement between Mr Reynolds and his creditors.

Last night, he remained defiant, saying: "Jesus was crucified for helping people, so what chance have I got? This is normal procedure - beyond that, I don't wish to comment."

Mr Reynolds was pinning his hopes on a rescue deal for the club led by mystery businessman Ted Forster. He is due to fly into Teesside today from his Greek base with a £4m cheque made payable to George Reynolds as part of his bid to take over the Quakers.

* The documentary, George Reynolds - Playing By His Own Rules, will be repeated nationwide on BBC2 on Tuesday. It will include updated footage. Match report - see sport