Sinnott left Farsley Celtic to take up the manager's post at Port Vale
Port Vale chairman Bill Bratt has denied the club are guilty of any wrongdoing in the payment of compensation to ex-manager Lee Sinnott.
Sinnott is taking legal action against the Valiants, claiming that Friday's deadline for payment was missed.
But Bratt told BBC Radio Stoke: "The club have kept by the arrangement to pay his salary into a designated bank account every month without fail.
"We don't renege on agreements and have continued to pay him."
Bratt continued: "He is asking for a lump-sum for the outstanding 18 months of his contract and at the moment that is money that we can't pay out in one go."
However, Bratt's claims that an agreement is in place to pay his former manager in monthly instalments have been rebuffed by Sinnott's lawyer, Paul Daniels.
"Under Lee's contract he was entitled to be paid, within 28 days of the termination of the employment, the sum that was agreed," said Daniels.
"This sum was less than the total balance to end of the contract and has not been paid.
"What the club are doing are merely paying much smaller sums in instalments and not complying with the contract," he added.
With both parties in agreement that Sinnott has been receiving payments on a monthly basis since leaving Vale Park in September, Bratt said he is disappointed that the club now faces legal action.
"When we have been paying someone and have not missed a payment then I would have expected that we would have been able to talk about this," said Bratt.
"I hope I can get in touch with Lee and put the matter to bed because I don't feel there is any need for a solicitor.
"I would have preferred to have this resolved before now because cash is very hard to come by and that's why we wanted to pay Lee on a monthly basis," he added.
However, Daniels has disputed Bratt's claims that Vale are seeking a swift conclusion to the dispute.
"It isn't true that the club have made strenuous efforts to resolve this," said Daniels. "Our latest letter did not even get a reply."
Sinnott spent 10 months in charge at Vale Park, in which time the Burslem club were relegated from League One.
He was appointed as manager of Unibond Premier Division side Bradford Park Avenue on Friday.
In a statement on the Park Avenue website Sinnott said: "My decision to take up the reins here at Bradford Park Avenue was made after 1600 GMT on Friday, 16 January when Port Vale FC again failed to meet a legal deadline.
"After consultation with my legal representatives I feel I have no option but to proceed with court action."
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