Austin-Smith-Lord (ASL) partner Jennifer Dixon has spoken of the ‘appalling human toll’ caused by its financial crisis and urged its debtors to pay up to limit further ‘collateral damage’
On Friday, creditors agreed to a proposed company voluntary arrangement (CVA), which means those owed money by the AJ100 ranked practice can now expect to receive between 82-99p of every pound.
ASL was forced to seek a CVA and make 70 of its staff redundant last month after racking up huge debts.
The majority of the money, £11.3 million, is owed by prominent government-backed client Abu Dhabi Authority for Culture & Heritage (ADACH). ASL were working on the Emirate’s long-running cultural quarter project. An initial payment of £2.4 million two weeks ago from the ADACH was not enough to stop the practice from entering the CVA.
Dixon said: ‘The faster the balance can be paid and we can get out of the CVA, the smaller the collateral damage.
‘The human toll has been appalling. We didn’t do anything wrong. We had a fully signed-up contract with a blue-chip client. We never missed a deadline and the quality of work was exceptional.
‘One could be wracked with guilt but we didn’t put a foot out of line.’
She added: ‘It has taken its toll. To stay afloat we had to make a large number of people redundant instantly. As a result they are now creditors of the CVA.
‘However those [employees] that have stayed don’t get the protection of the CVA and their [unpaid] back pay is unsecured. It is a horrible situation.
‘Our staff have limited their other options by giving their loyalty to this one project. Because of confidentiality clauses with the client they can’t even use the job for their portfolio and jobs interviews.
‘People have given several years of work to this one project [in Abu Dhabi] and that’s a huge amount of emotional energy. So when the project goes down, it is like bereavement.’
Meanwhile Dixon would not reveal the name of the practice which last week offered to buy ASL but confirmed discussions were continuing.
She added: ‘There are some synergies and we have identified some strong complimentary circumstances. It is by no means an unreasonable suggestion. We have a mixture of geographical markets and sectors.
‘It won’t take months and months of agonising over.’