Unpaid fees from the Abu Dhabi Authority for Culture and Heritage have landed the firm in financial trouble

Troubled architect Austin-Smith:Lord could be taken over by another construction firm in a plan to save it from financial turmoil.

Austin-Smith:Lord (ASL) has found itself in financial difficulty in recent weeks after unpaid fees from the Abu Dhabi Authority for Culture and Heritage reached £11.3m. The money owed is for work on the Qasr al-Hosn cultural quarter project in the centre of the city.

ASL - which received £2.4m of the total amount owing two weeks ago - put back a meeting with its creditors to agree how it might pay back some of its debts from Monday this week to Friday, after Building went to press.

Last month, ASL opened talks with its creditors over a company voluntary agreement (CVA) , which would allow it to lessen its payments to its creditors, while continuing to trade. ASL was ranked the country’s sixth biggest architect according to Building’s 2010 consultants’ league table.

Neil Chapman, partner at ASL, said on Tuesday that it has still not entered the CVA. He said: “The [latest] options range between us retaining some controlling interest in the project and forming an alliance with another firm, through to us getting entirely taken over or coming to some sort of buy-out solution, but that’s pretty extreme.”

“We are giving the received proposal serious consideration and assessing the merits of the offer for the practice, the project and our creditors.”

Chapman added: “While the fees received to date are not sufficient to avoid entering into a voluntary arrangement [with creditors], it is incumbent on us to ensure we explore all possible avenues to recover and improve the situation to maximum effect and for all concerned.”

ASL has been forced to lay off all 13 staff in its Abu Dhabi office as well as 40 in London working on the huge Middle Eastern scheme.

Its creditors include Arup, which was acting as engineer on the scheme and is owed almost £4m, and project manager Buro Four, which is owed £700,000.