Receivers will be called in to take charge of the investment portfolio of property owner and one-time businesswoman of the year Ms Jan Fletcher after Leeds City Council issued a winding-up petition against Montpellier Estates Limited (MEL) for failure to pay £2m in costs to the council after losing a £40m damages claim.
The winding-up petition means it is unlikely that MEL’s unsecured creditors – including Leeds City Council – will see any of the money they are owed. It has been widely reported that Ms Fletcher has given a written undertaking to cover the costs of the lawsuit should the company be unable to do so.
Tom Riordan, chief executive of Leeds City Council, said: “Unfortunately, after we gave MEL every opportunity to pay the interim costs, including allowing them a further six weeks to find the money once the judge’s deadline to pay had expired, we have no choice but to take this action.” He added: “Defending this unfounded case – which the judge himself said publicly should never have been brought, costs the council in excess of £4m at a time when we have to make severe cuts to our budgets. It would be irresponsible of us not to try every legal avenue to reclaim this very large amount of public cash when MEL have completely failed to refund it to the people of Leeds”.