Staff from the architect’s now closed Abu Dhabi office hope to get paid before other creditors to the firm
The ex-staff of financially troubled architects Austin-Smith:Lord are taking legal action to reclaim salaries owed to them.
The staff, all of which were employed in the architect’s now closed Abu Dhabi office, are seeking to get paid as a preferential creditor to the company, which entered a company voluntary agreement (CVA) with creditors two weeks ago to stave of insolvency.
If successful the challenge would see the ex-employees get paid before other creditors.
Austin-Smith:Lord (ASL) closed its Abu Dhabi office which employed 13 people and laid off a further 70 staff in the UK after it racked up massive debts due to being owed £11.3m from the Abu Dhabi Authority for Culture & Heritage for work on its cultural quarter in the middle of the city.
Under the agreement with creditors ASL is expected to be able to pay back between 82% and 99% of the money owed.
The firm owes staff over £850,000 in late salary payments, although not all of this is owed to staff from the Abu Dhabi office.
Neil Chapman, partner at ASL, said: “What’s happening is the staff were employed under United Arab Emirates law and the CVA is governed by UK law. We are bound by the UK law.”
He said that the CVA supervisor, accountancy firm BDO, would be responsible for handling the challenge and working out if it agreed the staff have a right to be preferential creditors.
ASL has received payments of £2.4m and £750,000 in recent weeks to bring the debt down to £7.85m.