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NY Architect Files for Bankruptcy

Friday, January 16, 2015

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A well-known, 109-year-old New York-based architecture firm has filed for Chapter 11 bankruptcy protection, claiming it has failed to receive more than $2 million in fees from a Russian client, reports say.

In court documents filed Jan. 6, Swanke Hayden Connell Architects says it is unable to pay its bills due in part to an ongoing dispute with an unidentified Russian client.

Statue of Liberty
© / SeanPavonePhoto

Swanke Hayden Connell Architects' portfolio includes restoration of the Statue of Liberty. The firm recently filed for Chapter 11 bankruptcy protection.

The firm’s portfolio includes the Statue of Liberty restoration, work on the Fifth Avenue Trump Tower, and several recent projects in Russia, including the recent 72-story, mixed-use Eurasia Tower in Moscow.

The action notes that the firm’s wholly-owned subsidiary, graphic design company Design 360 Inc., is filing for protection under Chapter 11 simultaneously.

Dispute with Russian Client

Richard S. Hayden, the principal who owns two thirds of the business, claims the Russian client alleges to have suffered damages as a result of alleged delays and omissions from the architect.

Thus, the client has withheld $2,296,505 owed to the firm, Hayden notes.

The architect says that it has hired legal counsel in Moscow to seek resolution of the matter through mediation, and believes that “it has properly performed and will be vindicated and is therefore entitled to payment.”

But, Hayden adds, “There are also unresolved political and economic issues which may play a role in the outcome.”

Drop in Business

The firm also notes economic slowdowns and reduction of new work orders have led to the filing.

© / hynci

An undisclosed Russian client has withheld $2,296,505 owed to the firm, Hayden claims.

In 2001, the architecture firm was ranked 53rd biggest employer of architects in the world; however, the firm is believed to have “suffered a significant drop in income over the last five years,” according to DeZeen.

Hayden says two of its principals—one who was in charge of its health care sector and the other in charge of its public/municipal business—left the firm in 2014.

Those sectors represented around 50 percent of the firm’s gross business, Hayden said.

At the time of the bankruptcy filing, the company was down to just 32 employees.

The firm has no bank debt and no unsecured loans.

Its main creditors include M-E Engineers, owed $632,000; United Reprographic Services, owed $499,000; and consultant Hankins & Anderson, owed $294,000, according to the court documents.

Firm History

Swanke Hayden Connell Architects is the continuation of the firm Walker & Gillette, founded in 1906. Walker & Gillette was most known for its design of large residences in New York City and on Long Island.

Headquartered in New York, Swanke Hayden Connell provides integrated design services in five core areas of practice—architecture, master planning, interior design, workplace consulting, and historic preservation.

Its clients included those in corporate/commercial, healthcare and health sciences, residential, government and institutional, and education sectors.

Swanke Hayden Connell has offices in Washington DC, Miami, Shanghai, and a London affiliate, according to its website.

Work by the firm has been featured in Durability + Design magazine, see: “Gilded Age Gems: Restoring Victorian Grandeur in SoHo’s Historic Cast Iron District” and “Asphalt Green’s Fresh Face.”


Tagged categories: Architects; Architectural history; Architecture; Business management; Business matters; Color + Design; Design; Europe

Comment from Gary Burke, (1/16/2015, 9:59 AM)

one customer not paying can kill even the biggest companies!

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