Millionaire to make offer on legal costs over arena wrangle

Council bosses recently announced they were bringing a bankruptcy action against Ms Fletcher, who owes the local authority £2m in interim costs following the arena case.

But, during an initial bankruptcy hearing at Harrogate County Court yesterday, her legal team said she would be making an offer to the council regarding the costs.

The hearing was adjourned, leaving the council waiting to see what form the entrepreneur’s offer would take. A Leeds City Council spokeswoman said: “We are determined to pursue recovery of the very significant costs to us of defending this case and will look at any offer very closely to see if Ms Fletcher can come forward with credible proposals for meeting her debts to council taxpayers in Leeds.”

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 she had been duped by council bosses into competing in a sham selection process.

Rejecting the £40m damages claim in February last year, Mr Justice Supperstone described her evidence as “unsatisfactory” and said she had a “tendency to exaggerate”.

He also said he was not satisfied some of the conversations she repeated to the court had actually taken place.

At a hearing last October, the same judge gave Ms Fletcher four weeks to pay the council’s interim costs. No money was forthcoming, which led to the authority’s bankruptcy move.

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.

Council chiefs have previously also issued Ms Fletcher’s Montpellier firm with a winding-up petition.

Montpellier’s largest creditor, banking giant RBS, responded to the petition by calling in receivers to secure the best possible return on several pieces of property owned by the company.

Sites placed under the control of the receivers included the land at Sweet Street as well as the firm’s head office in Harrogate’s Cold Bath Road. Montpellier’s financial advisers warned last July that the winding-up petition meant it was unlikely that the company’s unsecured creditors – including the council – would see any of the money they were owed.

The local authority subsequently announced, however, that it would be pursuing Ms Fletcher personally for its costs.

Speaking after her original court defeat last February, Ms Fletcher said she remained “passionate” about Leeds. The one-time businesswoman of the year added: “Anyone who knew what went on in this arena bid will understand why we took this action against Leeds City Council.”