A company at the centre of legal action over crumbling Embassy Court on Brighton seafront is willing to sell the flats it owns, a court heard.

Residents living in the art deco block, in King's Road, have applied for a ruling at Brighton County Court ordering Portvale Holdings, which owns nine of the 72 flats, to pay its service charges.

The lessees, who own the freehold and formed a company called Bluestorm, say they cannot pay daily maintenance costs unless Portvale Holdings starts paying.

Portvale Holdings is claiming damages against Bluestorm for failing to carry out major repairs.

On the fourth day of the hearing yesterday, Dean Golding, a property manager who runs the flats owned by Portvale Holdings, told the court the company wanted to sell up.

He said: "To my knowledge it is the current intention to sell flats owned by Portvale Holdings when a buyer can be found."

Mr Golding, a former director of Portvale Holdings and another company just called Portvale, said no decision was being made at the moment because of the current legal action.

He said: "If we received a good offer we would sell as soon as possible."

Mr Golding spoke of the frustration and animosity that had been created by the dispute between Portvale and the lessees association.

But he said the decision not to pay the service charges since Bluestorm took over the freehold in 1998 had not been made because of the ill feeling.

The court heard that because of the lack of a working relationship between the parties there has not been progress on repairing the block.

Mr Golding said: "The idea of these proceedings is to bring the issues to a head."

A counter claim against Bluestorm is being made by Chris Camillin, solicitor for Portvale, who also owns 15 flats.

He wants the court to make a specific performance order, which would force the freeholder to restore the 12-storey building.

He is also claiming damages of £80,000 which he says covers the loss of rent he cannot get tenants to pay because of the rundown state of the building.

A director of Portvale Holdings is David Marcel, who formerly ran Portvale, a company which owned the freehold until 1997 when it went into liquidation after being ordered by a judge to carry out repairs costing £1.5 million.

The freehold then passed into the hands of the Crown Estate Commissioners and then, after a series of court hearings, was taken over by the residents association.

During the hearing, Judge Michael Kennedy and the legal teams on both sides had visited the block of flats, which is estimated to cost £4.5 million to restore to its former glory.

The hearing continues.