Property developer faces bankruptcy after procurement challenge fails

Gurjit Degun
28 January 2014

☛ Want the latest procurement and supply chain news delivered straight to your inbox? Sign up for the Supply Management Daily

28 January 2014 | Gurjit Degun

Leeds City Council has brought bankruptcy action against the former chairman of a property developer to recover legal costs after a failed procurement challenge.

In October 2013, the local authority was granted permission by the High Court to chase Jan Fletcher of Montpellier Estates for £2 million. The judge gave Fletcher until 14 November to pay the interim costs, pending a final decision on the total due, but she failed to meet this deadline.

Tom Riordan, chief executive of Leeds City Council, said: “[The judge] ruled [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.”

When a person is made bankrupt, the court usually appoints an official receiver who is responsible for their assets. The receiver, who also acts as the trustee, sells the assets and distributes the money among creditors.

The case relates to a procurement process to find land and a developer to build an arena in Leeds. In February 2013 the local authority won a court battle in which Montpellier Estates had alleged the council had broken rules, breached an implied contract and had deceived the company to keep it in a procurement competition.

Riordan added the council has been “left with no choice” but to bring bankruptcy action. “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,” he said.

The bankruptcy hearing will take place at Harrogate County Court on 5 February.

LATEST
JOBS
Hounslow, Heathrow /Richmond upon Thames
Competitive salary depending on experience plus generous share award
Tails.com
London
GBP60000 - GBP70000 per annum + Excellent Package
Bramwith Consulting
SEARCH JOBS
CIPS Knowledge
Find out more with CIPS Knowledge:
  • best practice insights
  • guidance
  • tools and templates
GO TO CIPS KNOWLEDGE