RMJM puts UK firms in receivership as part of ‘restructuring’

RMJM developed the Scottish parliament building. Picture: Kenny Smith
RMJM developed the Scottish parliament building. Picture: Kenny Smith
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THE firm of architects behind the development of the Scottish Parliament building has called in the receivers on UK operations in a bid to avoid or delay paying millions it owes to creditors.

Edinburgh-based RMJM, which is responsible for designs such as the Falkirk Wheel and the China National Convention Centre in Beijing, and which controversially hired disgraced banker Fred Goodwin as a consultant, has “sold” the assets to a new firm, and says that the move has saved 120 jobs.

The new company, RMJM Architecture, is majority-owned by Sir Fraser Morrison and his family.

The news of the “restructuring” exercise came as it emerged bailiffs had raided RMJM’s London office after a dispute over an outstanding payment to a German engineering firm.

The Architects’ Journal reported that the struggling RMJM owed £55,649 to Müller-BBM for work on the controversial Gazprom tower in St Petersburg.

The new company has set up offices in Westbourne House near Notting Hill, London. Recently it also relocated its Manhattan office after a spat with its landlord resulted in the issue of an eviction notice by the civil court of New York City. In August, the loss-making RMJM was also named and shamed by the New York state department of taxation and finance, which listed the company on its list of top 250 delinquent taxpayers for an outstanding bill of $843,138 (£524,000)

Research by another trade magazine, Building Design, showed that the three divisions that have been put into receivership – RMJM Ltd, RMJM Scotland and RMJM London – have a total of £294,165 in outstanding county court judgments.

According to the latest accounts, which were filed as late as August, the company owed more than £16 million as of April 2011. In that year, RMJM racked up an £11m pre-tax loss compared with a £1.2m profit in 2010.

In its financial statements, the company said it had instigated a “strategic review”. Blair Nimmo, of KPMG, said it would help “achieve the maximum return for the companies’ creditors”.

He said: “The companies’ businesses have been very severely impacted by the slowdown in the construction industry as a result of the worldwide recession.

“The sale of the businesses to RMJM Architecture will help facilitate continuation of the companies’ current contracts, preserve the employment of some 120 people and achieve the maximum return for the companies’ creditors.”

In a statement, Peter Morrison, the chief executive of RMJM and the son of Sir Fraser, insisted that “all 120 UK jobs have been secured as a result of the restructuring”.

He added: “The RMJM team around the world have shown tremendous resilience and loyalty in extremely challenging circumstances over the last number of years.

“The financial issues the business has faced are a direct impact of a brutal global recession and the well-documented impact of this on the UK construction market.

“This restructuring is designed to support the clients, projects and the staff of RMJM’s business in the UK.”

The company said that the business was now part of a new RMJM European division, which would continue to operate alongside RMJM Middle East, RMJM US and RMJM Asia, where the firm has been awarded a number of significant projects.

But Glasgow architect Alan Dunlop said the emphasis on a European division left a question mark over RMJM’s UK operations and staff.