The former owners of the Telegraph have avoided bankruptcy after reaching a settlement with HSBC over more than £140m in overdue debts.

At a high court hearing on Tuesday, Europe’s biggest bank said it had withdrawn proceedings against Aidan and Howard Barclay, whose family lost control of the Daily and Sunday Telegraph in 2023 over £1.16bn of unpaid debts owed to Lloyds Bank.

HSBC initiated legal proceedings against the brothers last year after the collapse of Logistics Group, which was linked to the Barclay-owned courier service Yodel.

The bank was owed £143.5m by the business, with the brothers having provided personal guarantees to secure the loans. HSBC later clawed back £1.1m from the administration process, according to a report in the Telegraph.

The bank withdrew its legal action after the brothers, aged 70 and 66, agreed to a debt repayment plan, or individual voluntary arrangement (IVA). Details of the agreement were not disclosed. However, the court was told that the IVA will require the brothers to cover HSBC’s legal costs.

If HSBC had won a bankruptcy order it would have allowed the bank and other creditors to take control of the Barclays’ remaining assets and sell them off.

The brothers would have faced a ban on holding company directorships for at least a year, or be legally required to disclose the bankruptcy to lenders when seeking to borrow more than £500m.

In October the Carlyle Group, a US private equity firm, took control of Very Group, the owner of Littlewoods and the online shopping site Very, bringing an end to two decades of ownership by the Barclays. The family also sold off the Ritz hotel in London for about £750m amid a feud over their assets.

After three years of uncertainty over the ownership of the Telegraph, which the Barclays acquired in 2004, the German media group Axel Springer paid £575m to buy the titles and took control this month.

HSBC and the Barclay family declined to comment.