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.

Previouse Story--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.'