ASL's cultural project in Abu Dhabi
Beleaguered practice will recoup just over a third of Abu Dhabi debt
Austin-Smith Lord, which was forced to close its London office earlier this month, is to recoup just over a third of the £4 million owed to it by its Abu Dhabi client.
The 62-year-old practice ran into trouble last year when client Adach refused to pay fees totalling £11.5 million for its work as lead consultant on the Qasr al-Hosn cultural quarter in Abu Dhabi. While some of this has since been paid to other parties, the architect has been offered just £1.5 million.
According to a report by insolvency practitioner BDO, the firm may receive less than half of this after claims by 14 ex-staff in Abu Dhabi are dealt with. They have filed claims totalling £781,000 , which if successful will be deducted from the £1.5 million.
Meanwhile, increasing numbers of UK staff have made unfair dismissal claims in an attempt to recoup the remainder of their unpaid salaries.
A former staff member who has filed an unfair dismissal claim said: “We are all owed certain sums of money and it’s difficult getting that money from the CVA process.
“The employment tribunal simply strengthens our case. I believe the practice is still pursuing the sums of money that are owed to them. We are not very well informed.”
Most of the redundant UK staff have received payments of just £800 in wages plus holiday pay and pensions contributions. Ninety-seven UK employees who have been made redundant are owed around £850,000, with some individuals owed up to £45,000.
Under the terms of the CVA (company voluntary arrangement) it entered into last year, ASL agreed to pay creditors 85p in every pound owed. But the arrangement relied on Adach’s debt being paid in full.
ASL’s largest creditor, Arup, which was owed £3.8 million, has received direct payments from Adach and the secured creditor Lloyds TSB was owed £1.41million and has been paid in full.
According to BDO, the UAE court rejected a bid for the Abu Dhabi staff’s claims to be dealt with under UK insolvency law.
ASL declined to comment.
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