Businesswoman Jan Fletcher faces bankruptcy hearing over Leeds Arena case

Leeds City Council is bringing a bankruptcy action against Ms Fletcher, who owes the local authority £2m in interim costs from the arena case.

A judge gave her four weeks to pay the costs in October but no money has been forthcoming.

The one-time businesswoman of the year’s bankruptcy hearing will take place at Harrogate County Court on February 5.

When a person is made bankrupt, they have to hand over their assets to a trustee such as the official receiver. The trustee then oversees the sale of the person’s assets – possibly including their home – to pay their debts.

Leeds City Council said it had been left with “no choice” but to bring the bankruptcy action.

Chief executive Tom Riordan told the Yorkshire Post: “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.”

Ms Fletcher took the council to court following its surprise decision in 2008 to make Clay Pit Lane, in Leeds city centre, the home of the arena.

It had been thought that Sweet Street in Holbeck – a site owned by her Harrogate-based Montpellier Estates firm – and land next to Leeds United’s Elland Road ground were the only places in contention to win the scheme.

In the event, however, the council not only chose the Clay Pit Lane location, it decided to build the venue itself.

Ms Fletcher alleged that she had been duped by council bosses into taking part in a sham selection process but her £40m damages claim was rejected by a High Court judge.