Businesswoman faces bankruptcy hearing after failed procurement claim

A county court will next week hear the bankruptcy proceedings being brought by a local authority against a property developer whose company unsuccessfully sued the council for claimed procurement breaches.

The hearing at Harrogate County Court on 5 February comes after Jan Fletcher, former chairman of Montpellier Estates Ltd, failed to pay Leeds City Council £2m in interim legal costs.

In the High Court last October, Mr Justice Supperstone had ordered Fletcher to pay the sum before 14 November, pending a final decision on the total amount due.

Commenting ahead of the hearing, Tom Riordan, chief executive of Leeds City Council, said: “[The judge] ruled [Ms Fletcher] was personally liable after accepting she agreed in writing in advance to guarantee paying should her former company’s action against us be lost and Montpellier Estates Ltd were unable to foot the bill.

“This has left us with no choice but to bring this bankruptcy action in order to recover what are very large sums of money. We simply cannot afford not to actively pursue this cash for council taxpayers at any time, but never more pressingly than when we are having to significantly reduce our spending again after several years of budget cuts.”

Montpellier Estates brought a £43.5m claim against over the development rights for a £60m arena in the city.

The company alleged procurement breaches and, initially, deceit when Leeds ended a competition to build the arena and chose to develop a separate site it owned.

Montpellier owned one of two sites that had been in the running in the original competition. The company claimed to have received assurances from the council that it did not intend to build the arena itself.

In February 2013 Mr Justice Supperstone rejected the claim, ruling also that the deceit claim should never have been brought.