Former employees out of pocket by £850,000
Former staff at stricken architect Austin-Smith Lord are owed more than £850,000 in unpaid wages with the firm admitting staff will only be paid if its client on the Abu Dhabi project at the centre of its financial problems pays its debt in full.
The practice was forced to lay off 70 staff last month after it admitted it was owed £11.3 million on a cultural quarter by the Abu Dhabi Authority for Culture & Heritage (Adach).
The company was saved from going under when it was put into a company voluntary agreement (CVA) – which protects the business from winding-up petitions from creditors – earlier this month. Creditors, including the former employees, were told they would be paid 85% of what was owed to them.
But ASL partner Jennifer Dixon told BD that this figure was dependent on the practice being paid by its Abu Dhabi client. It has already recouped £2.4 million but Dixon added: “Creditors will only get 85p in the pound if the client pays in full.
“If Adach doesn’t pay, [redundant staff] won’t be paid. And the quicker it pays, the quicker the ex-staff will be paid and people will regain their normal lives.”
Minutes of the CVA meeting show ex-staff are owed just over £843,000 but the total will be much higher because the majority of ex-staff didn’t vote on whether to accept the CVA and are therefore not listed in the report.
The published figure of what staff are owed amounts to nearly 15% of the total £5.7 million listed in the report as being owed to all creditors.
Among those employees owed thousands of pounds are former director Norman King, a 35-year veteran at the business who is due nearly £44,000, and associate Darren Andrews, who is owed more than £36,000.
Twelve former staff members voted against the CVA – effectively a vote for the practice to be wound up, though they were heavily outnumbered.
One senior insider said this would have left all creditors substantially worse off but could be interpreted as an indication of their anger towards ASL. “I find their decision extraordinary,” said the source.
The largest creditor is named as Arup’s Middle East arm, Arup Gulf, which is owed nearly £1.4 million.
Consultant Buro Four is due £697,000 while Coe Design Landscape Architecture is owed £515,000. And HMRC is out of pocket by £535,000.
Former ASL partner Richard Pullen, who retired in October last year, is owed £68,735. Pullen is now the non-executive chairman of Wren Insurance, a company which provides professional indemnity insurance for architects and which is owed £161,000. ASL also owes three public relations firms just over £60,000 in total.
Surviving staff who are owed salaries will be paid in full from the practice’s other projects, Dixon promised.
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