David Adjaye has been forced to turn to insolvency experts to rescue his firm from the brink of financial collapse, despite pumping in over eight hundred thousand dollars of his own money to keep it afloat, according to Building Design.
Following a period in which it owed more than $1.7 million to creditors, it emerged this week that Adjaye Associates has entered into a Company Voluntary Arrangement (CVA), a deal to stave off insolvency under which it will repay 43 percent of its debt to creditors including Her Majesty’s Revenue & Customs.
Adjaye, who formed Adjaye Associates in 2000 and was short-listed for the Stirling Prize in 2006 for his Whitechapel Idea Store library, has rapidly developed a reputation as an international architect, opening offices in Berlin and New York and earlier this year winning a leading role to design the National Museum of African American History and Culture in Washington, DC.
Despite its profile, there are now fears that that the firm’s financial problems will see it struggle to enter public competitions in the future due to rules laid down in the Official Journal of the European Union. The Royal Institute of British Architect’s Richard Brindley said it would be difficult for any practice with insolvency problems to win new work.
Lane Bednash, partner at insolvency practitioner Valentine & Co, which is supervising the CVA, said the arrangement had proved necessary when Adjaye Associates opted to keep staff employed after projects in Birmingham, Abu Dhabi, Kuala Lumpur, and India were stopped or delayed.
“[Adjaye] took a calculated risk on the basis those projects would continue, but unfortunately there were problems that the clients hadn’t foreseen,” he said. Accounts from March 2008—the most up-to-date available—show that the company made a loss of $96,760 and owed more than one million dollars to creditors.
Speaking this week, Adjaye admitted the practice had made some staff redundant last year but insisted it was over the worst of its financial problems and would not be forced to close any part of the business, including the American arm, Adjaye Associates. “The CVA is a reality, but it’s nothing to be ashamed of,” he said. “It was difficult last year due to the financial crisis, but we’re through it now. We have enough work on our books and we’re repaying our CVA very well, so we’re in a good place.”