Council will lose out from arena dispute with Montpellier Estates
LEEDS City Council is unlikely to get a penny of the £4m it cost to defend itself in a High Court case brought by Jan Fletcher’s Montpellier Estates over the site of the city’s new arena.
Advisors to the troubled Harrogate-based property firm have criticised the council for bringing a winding up petition against the firm, which yesterday saw receivers appointed to its land and property portfolio, as reported by TheBusinessDesk.com.
BTG Financial Consulting, advisors to Montpellier Estates Ltd (MEL), said the issue of a winding up petition was an “unfortunate outcome” which will see unsecured creditors, including the council, get nothing.
Mark Fry, partner at BTG Financial Consulting, said that Montpellier had been in discussions with both its bank , Royal Bank of Scotland and the council, with the aim of paying the council in full.
Mr Fry said: “The presentation by LCC of a winding up petition brought an end to these discussions and left the bank with little option. It is not expected that there will be any return to unsecured creditors, which includes the council.”
MEL had appealed against the Court judgment but had agreed to ‘stay’ that whilst in settlement discussions with the council.
Mr Fry said that by issuing a winding up order, Leeds City Council has ensured that Montpellier is now unable to appeal or “get the justice they still believe is due.”
Following the end of the court case in February, a High Court judge awarded Leeds City Council interim costs of £2m after a court case he said “should never have been brought”.
The council had said its costs were more than £4m and the costs for Montpellier Estates estimated to be a similar amount.
Lawyers to Montpellier Estates have advised the company not to comment at this time.
Speaking to TheBusinessDesk.com, a spokesperson at Leeds City Council said: “Leeds City Council is unable to comment at present due to the sensitive stage of the current legal process.”
