Mr Cunliffe, who denies any wrongdoing, was accused of unlawfully authorising payments to companies or individuals he was associated with.
Mr Cunliffe denies the allegations and says he will contest any claims made in court. He is also intending to seek damages against the golf club for “false accusation and defamation of character.”
Mr Cunliffe, formerly from Scarisbrick, but now living in Windermere, Cumbria, said: “The company was in a position to move forward when I was dismissed as financial director in July 2005.
“I absolutely refute any wrongdoing or involvement in damages of £700,000. No damage has been done to the company whatsoever, in terms of what I was involved with.” The club and adjoining leisure centre continue to operate as normal, while possible rescue packages are sought by Kroll.
A statement was given to shareholders last month updating them on the situation.
The statement said that Mr Cunliffe was arrested by police on October 12, 2005, and quizzed over the alleged fraud.
Police said that they needed the expertise of a forensic accountant, at a cost of £150,000, to fully complete their investigation into the affair.
The shareholders’ statement read: “The CPS decided that more detailed investigations were needed, particularly the evidence of forensic accountants to independently verify the unauthorised payments identified by the company.
“Bearing in mind that the CID has been working with director Ruth Hurst-Vose virtually full-time for 18 months, costs were already high and with little chance of recuperation the further expenditure of a minimum of £150,000 and a further year’s work on the case are not felt justified.
“The police advise this should not deter us from continuing with the civil action.”
A freezing order for £190,000 over Mr Cunliffe’s assets was granted at Manchester Crown Court in August, 2005, and is still in place, according to the statement given to shareholders.
Jim Vose, who with his wife owns 90% of the ordinary shares in Hurlston Hall Golf Club PLC, said about the decision to go into administration: “It is a very sad day.”
Mr Vose and Mr Cunliffe played together in the same Ormskirk Rugby Club first team for around 15 years in the 1960s and 1970s, and were good friends.
By way of diversification from farming by the Vose family, the clubhouse was unveiled in October, 1993, on land off Southport Road, Scarisbrick, and the golf course itself, on 135 acres of land, opened the year after.
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