The council told John Clark in 1989 his shop in Solihull High Street was to be made the subject of a compulsory purchase order to make way for a new shopping centre.
However, it was three years before the council issued the order, during which time Mr Clark could not sell his business or get compensation for blighted property.
According to Mr Clark his business made £40,000 profit in 1988 but began to suffer in the recession. He put the shop on the market but failed to get a buyer because of the order. He went into voluntary liquidation in 1991.
A follow up report was made criticising the council's attitude and it was again ordered to pay compensation.
A council spokesperson said the council did not accept it was guilty and would not pay any compensation.