Creditors of Montpellier Estates, the property business, are facing the shortfall after receivers were appointed last month by its bank after a winding-up petition was issued by Leeds City Council.

The Council had looked to recover millions of pounds it had been awarded in costs after defeating Montpellier in a high-profile case about the procurement of the Leeds Arena.

The firm’s millionaire owner, businesswoman Jan Fletcher, is now being pursued personally by the council and could lose out on almost £1 million in her capacity as an unsecured creditor.

Montpellier suffered defeat earlier this year when the High Court ruled in favour of the council. Mr Justice Supperstone made an interim cost award of £2 million in favour of Leeds City Council on 25th April 2013, to be paid in 28 days, while the council said the case cost it in excess of £4 million.

The council’s subsequent decision to issue a winding-up petition in a bid to recover its costs led to the appointment of receivers by Royal Bank of Scotland, Montpellier’s largest creditor.

In July, Jon Gershinson and Louisa Brooks of Allsop were appointed as joint fixed charge receivers over properties owned by Montpellier Estates.

Two partners at Begbies Traynor were then appointed in August as liquidators. A Begbies report has now revealed the losses creditors of Montpellier are expected to face.

Asset realisations from across the Montpellier portfolio, which includes several sites across Leeds and further afield, are expected to bring in £15.3 million but will not be enough to discharge the £29 million owed to the bank.

Unsecured claims totalling £6.3 million are not expected to receive any cash, including Jan Fletcher who is owed £986,218.

Montpellier had unsuccessful claimed damages of more than £43.5 million on the basis that it was duped into bidding for a £70 million contract to develop the Leeds Arena when the council had already decided to carry out the project itself.

The case was subsequently thrown own by a judge, who criticised Fletcher’s own evidence.

Montpellier had sought leave to appeal but at the time of the receivership, liquidator Mark Fry said that this was no longer a possibility.

At the time of the appointment of receivers, Fry said: “The presentation by [Leeds City Council] 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.”

The £60 million First Direct Arena officially opened this week.

A court hearing over further costs is expected later this year.