A bankruptcy order against property developer Jan Fletcher has been officially dropped after a last minute agreement with Leeds City Council. The former boss of Montpelier Estates Ltd (MEL) had refused to pay £2m in court costs awarded against her company last year.
The company was ordered to pay the costs after a nine-week hearing in February during which it was claimed Montpelier had lost £43m over the development rights to the £60m Leeds Arena scheme. The court heard the company submitted a £70m bid for a site known as “City One” in a 2007 council competition to find an arena project. The authority later abandoned the competition and developed the arena itself.
The basis of Montpellier Estates’ case was that senior council officers and former council leader Andrew Carter had committed fraud and acted dishonestly during the bidding process. All the accusations were later dropped or dismissed. Ordering the company to pay the city council’s £2m legal fees, Mr Justice Supperstone said: “I am left in no doubt that the claim for deceit should never have been brought.”
The judge also ruled the council had been perfectly entitled to cancel the competition to develop the arena and build it itself when other bids were found to be not good value for money. “This reinforces the integrity of the council’s conduct on the decision to cancel the competition to develop the arena,” said the authority’s chief executive Tom Riordan.
When Montpelier failed to hand over the money the High Court granted permission for the council to pursue Fletcher, the company’s former chairwoman, personally for the costs. Prior to the 2013 case she had guaranteed in writing to cover all costs should MEL lose and not be able to pay.
A bankruptcy petition against Fletcher was then issued by Leeds City Council, but at a Harrogate County Court hearing on Monday [14 April] the authority announced it had reached an out of court agreement with the businesswoman and that a portion of the debt had been cleared. Deputy district judge Bruce Buchan agreed to a council request to dismiss the petition.
“I’m very pleased that we have been able to recover a significant sum of the money we should never have had to spend in this case,” said Riordan, after Monday’s hearing. “I’m satisfied, based on legal advice, that this is a good deal for council taxpayers.
“This has been a long drawn-out and costly legal process and we are finally drawing a line under it by recovering as much as possible of public money at a time when our budget pressures are particularly severe.”
Ironically, Fletcher — an entrepreneur with a portfolio of business interests from international property development and investment to natural health products and restaurants — was the first chairman of Marketing Leeds, the company formed to promote the city as a place to live and work. She was handed the 2005 job of attracting global business to Leeds, following criticism from then Confederation of British Industry director general, Sir Digby Jones, of “complacency” which he claimed was holding it back.
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