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Austin-Smith:Lord files for insolvency

Austin-Smith:Lord (ASL) has filed a notice for a company voluntary arrangement (CVA) just days after it announced it was making 70 staff redundant

The 61-year-old practice, which was ranked as the seventh biggest architectural outfit in the AJ100 rankings in 2010, is understood to be owed millions in unpaid fees by a client in Abu Dhabi.

ASL director Neil Chapman said: ‘Obviously this is not good news. There are now 17 days before we enter voluntary arrangement.

‘Our key creditors are prepared to support us - with the two main creditors on side. We have a very strong, robust [business] case in the UK.’

Last week ASL admitted it was owed money dating back to May which had also caused salaries to be paid late but that ‘diplomatic efforts’ at government level were continuing to try and ensure payment from the Middle Eastern client.

Previous story (AJ 09.11.11)

Austin-Smith:Lord cuts 70 staff

Austin-Smith:Lord (ASL) has been forced to make 70 staff redundant, including 40 in its London office alone

The majority of the redundancies have been blamed on payment delays on a major project in the Middle East. It is understood the practice is owed money dating back to May, a situation which also caused salaries to be paid late at the AJ100 big hitter.

ASL confirmed that market conditions in the UK were to blame for another 30 redundancies in its Cardiff, Glasgow, Liverpool and Manchester studios.

A spokesman for the practice said: ‘There is no dispute between the parties at the centre of the non-payment issue. [ASL] is part of a major consortium and has enjoyed an excellent and rewarding relationship with this client over a number of years.

Payment is being hampered by extraordinary events outside the client’s immediate control

‘The client fully accepts its responsibility to pay amounts due, however payment is being hampered by extraordinary events outside its immediate control.
‘There have been, and continue to be, concerted and strenuous efforts underway at the highest diplomatic and political levels to speed payment of outstanding fees.

‘While every effort is being made to ensure payment of funds, and while the situation is one that can be overcome, it cannot be allowed to continue unabated and it is as a result of this that the Partners of ASL are having to take this step.’

The practice admitted the cashflow issues had caused it to ‘agree revised payment schedules on balances outstanding ’ with suppliers, sub contractors and other creditors.

A spokesman added: ‘The support of creditors has been and continues to be instrumental in managing the business cash flow and has allowed the practice to progress robust and positive plans for its restructuring. The partners have been overwhelmed by the support of staff, suppliers and sub-consultants alike during this difficult time and would take this opportunity to thank all involved.’

 

Readers' comments (16)

  • JustFacades.com

    i believe we need governmnet action to get invoices paid on time, as is the norm in France for instance.

    Good luck ASL

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  • For clarification, the Manchester Civil Justice Centre which is very prominent in the background of a photograph that accompanies this article was designed by Denton Corker Marshall.

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  • But the Peoples History Museum extension, very prominent in the foreground, is by AS:L

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  • Doubtlessly the least unexpected information all year.

    A-S:L have plagued the AJ over the past two years with stories and woes about redundancies, so their voluntary insolvency (and that's what this is) can't be construed as catching people off guard.

    My heart goes out to the ladies and gentlemen that are in financial trouble as a result of A:S-Ls poor administration and poorer economic responsibility, but every single person saw this coming like an asteroid.

    I hope the complete upper echelons are assumed wholly accountable and recompense everyone what they are rightfully owed.

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  • Why is this article so sympathetic? It sounds like the management of AS:L gambled on a dodgy middle eatern country and lost. Why should we pity them? I pity the staff who put their own financial future and livelyhood at risk to support their firm, only to be let go and told by the media that it was nothing to do with their bosses.

    Just like the RIBA, this article stinks of an old boys cub where you look after your mates at the top and to hell with the lower orders. Pity the poor directors..

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  • I couldn't agree more with the previous articles. The directors at AS:L have had their head in the sand for years. I too pity the many loyal staff that have endured the worry of redundancy; not been payed properly for months and put up with managerial incompetence for years.

    AS:L produced good work but their only real asset, like any consultancy company, was their staff. Treating them like this will only mark their cards as a poor employer for years to come- assuming they last that long.

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  • People have been made redundant and are still not getting paid... very sad state of affair.
    The company is very top heavy, and went in the Middle-east with a great deal of naivety, probably trusting the wrong people.
    Desperate cut in staff at that level also means that they have lost a great deal of talent and experience, making the chances of recovery even less lightly.
    I also agree with the comments above management was enable or unwilling to change until it was tool late.

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  • Quote 'sounds like the management of AS:L gambled on a dodgy middle eatern country and lost'. The 'dodgy' country in question is Abu Dhabi (its on their website), you know the cash strapped emirate that owns Manchester City Football Club.
    ASL employed a considerable number of architects and resources to project/s in Abu Dhabi incurring massive costs in the reasonable expectation that such a wealthy client with no apparant financial problems would be honurable and pay what they owe. This turns out not to be the case leaving ASL partners, directors, staff and everybody else owed money to carry the can, redundancies and all.

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  • FACT, PHM, and other projects are all excellent pieces of work and I'm not sure what beef the earlier comment had about the practice's work.

    These are difficult times with many, many practices shedding staff. It's disappointing to see ASL have now fallen victim as well. Against this backdrop the vitriol of some of the previous comments saeem more than a little unfair.

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  • Really sorry to hear this news and I hope something is done to resolve the issue quickly - I find the job advert at the bottom of this page for a Senior Fit out Co-ordinator in Abu Dhabi slightly ironic!
    My hopes and best wishes go out to everyone at ASL you are all great at what you do and long may it continue - from a very loyal and happy client who always pays on time...

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  • Well done Peter Drummond!! I always thought you looked like a nice bloke in the profiles and you have just proved it. A bit of humility, appreciation for your competitors and empathy of how tough it is out there.
    As for the vitriolic among you - save it for Mr Gove!!

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  • Reality check....
    I worked in Abu Dhabi, here are the facts: Plenty of architectural practices are trading here and getting paid. The Abu Dhabi government, is still a viable place to do business with, and not the great devil, if you believe Austin Smith Lord management, solely responsible for all there troubles. The community here is a small one, so news goes around quickly, ASL has spent the last 3 or 4 years ? developing one scheme after another apparently never getting to a resolution. Meanwhile spending millions upon millions of dollars of the clients funds.
    It is also obvious that the comments above sub divide into mainly 2 camps, the staff laid off with no late wages and no redundancy payment either, in the worth job market in 80 years, and those remaining staff (mostly management?) and others with interests in ASL. The second will probably keep on re-arranging the chairs on the deck until the ship goes down.
    Worryingly some have resorted to personal attacks, probably in anger and frustration, be aware that this is the perfect excuse for others to dismiss your points of view. Finally spare a thought for the staff laid off and remaining, it must be hell. Don't fell too sorry for the management, a the end it is their responsibility, and blaming the Abu Dhabi government and the recession only, for all their troubles doesn't appear to fair.

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  • I completely agree with Emma's comments above.
    You are correct that the project in question has been in development for years and not since July 2011 as stated in various articles.

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  • It’s my opinion that ASL used the Middle East’s millions to keep people employed in the UK and would have continued to do so in the hope of emerging from this recession in an advantageous position in the domestic market, because let’s face it that’s where ASL’s real problems lay. A complete inability to win any new work in the Liverpool office for the past 18 months belies an office of over 50 staff. What we’re reading now would have happened a long time ago if it weren’t for the Abu Dhabi job. On a personal note as a former employee I’m saddened to see ASL go, it’s not so much the death of a company but the death of a way of working.

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  • Apparently Abu Dhabi owed £11.3 million to ASL!
    £11.3 million! That is a lot of cash! ASL must have down some really remarkable work for that ridiculous amount of money.. or maybe not....
    At any rate everybody could see it coming, it is obvious that some choose to bury their heads in the sand... yes it is pretty hard right now, but some manage it just great, so its change or die.
    Interesting, for ASL bosses, its winning the lottery or bust....

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  • Such a shame.
    Having worked with this organisation in the past we know their quality. Our sympathies and good luck wishes to all the staff.
    They are not the only ones sufering late payment. Unfortunately, the situation "out there" is forcing companies to risk working under these very risky circumstances.
    The biggest problems in our experience is coming from those in the best position to pay.

    Good luck guys. We wish you well.
    C

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