Nine former employees of ILEX in Derry are taking a case against Stormont over the way they lost their jobs.
ILEX was set up in 2003 to regenerate the former Army bases at Fort George and Ebrington, but was shut down in March amid accusations it failed to deliver enough investment and jobs.
Now, half of the 18 staff who lost their jobs as a result are taking a case against the Northern Ireland Executive, claiming it breached employment law.
Last year, an independent review criticised ILEX over failings in the redevelopment of Fort George Army base and Ebrington Barracks in Derry.
The report pointed to a lack of progress in infrastructure investment, particularly in the development of business accommodation.
Responding, ILEX pointed to its role in helping to build Derry's Peace Bridge linking the city centre and Ebrington, and also cited the opening of the North West Science Park on the Fort George site, a joint project with Letterkenny IT.
However, in October of last year, the Office of The First and Deputy First Minister confirmed that ILEX would close with the loss of 18 jobs, and many of its responsibilities transferred to Derry City and Strabane District Council.
The BBC is reporting today that nine of those workers are taking action against the Executive, claiming their jobs should also have been transferred to the council.
The Executive is refusing to comment, saying the matter is due before an Employment Tribunal next year.