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Scottish architects RMJM sued by US staff

• Holyrood designer accused of withholding $664,000 in bonuses
• Lawsuit follows merger with US firm Hillier

RMJM, the architecture firm responsible for the Scottish parliament, is being sued by employees in the United States over claims that it owes them hundreds of thousands of dollars.

The Scottish firm – which gave Sir Fred Goodwin his first job since his departure from RBS – is at the centre of a bruising row with its US staff in which it is also accused of siphoning off cash from an American company it merged with in 2007.

According to a lawsuit lodged last month in New Jersey and detailed in Building Design magazine, RMJM director Sir Fraser Morrison and his chief executive son, Peter, have reneged on the $24m (£15.5m) deal that saw the firm merge with US-based Hillier.

RMJM denied yesterday that it had siphoned off cash from Hillier but said it expected to pay staff the $664,000 they were owed "in the near future".

According to the legal papers – filed on behalf of a number of US-based principals by former Hillier owner and shareholder representative Bob Hillier – the company still owes $664,000 of a $1.5m cash bonus pool promised to staff for 2009 under the terms of the merger agreement.

The lawsuit, which seeks to recover the money plus interest and costs, also accuses RMJM of:

• Asset-stripping and "siphoning off corporate funds" worth up to $8m from Hillier, now known as RMJM Inc.

• Planning to cease "most or all" of its operations in Princeton this month following the closure of its Philadelphia operations in June.

• Trying to disguise the fact that Sir Fraser and Peter Morrison are the "alter egos" of RMJM and should thus be held liable for the cash.

"In the last three years … the plaintiff believes that RMJM Inc has transferred to RMJM Group and/or RMJM Ltd cash in the amount of approximately $8m and yet … has refused to meet their obligations," the lawsuit stated. "Upon information and belief, RMJM Group's principals divested RMJM of assets, transferring these assets to themselves and to other entities owned or controlled by these principals, without regard to the obligations."

The papers added that RMJM had cited "cash-flow difficulties" in its correspondence and noted that Fraser Morrison owns about 10m company shares and lives in New York, while Peter owns 400,000 shares and lives in Connecticut.

According to Building Design's 2011 World Architecture 100 survey, RMJM is the eighth-largest architecture firm in the world, dropping down from fifth in 2010.

Referring to the allegations, a spokesman for RMJM said: "We're surprised and disappointed at this move, as it's well-documented that, like virtually every practice, we've had to manage our cash carefully for the past 18 months. However, we fully expect the final $664k payment of the $24m we paid for Hillier to be made in the near future and for the matter to be resolved to everyone's satisfaction.

"Separately, the allegations of asset-stripping are both outrageous and completely and utterly untrue. In fact, the direct opposite has been the case, as millions of dollars have been injected into the US business since the beginning of the recession."

The news of the lawsuit came amid fresh rumours about Goodwin's status at the firm. Scottish media have suggested that the disgraced former banker had not been seen at RMJM for weeks.

A spokesman for RMJM said: "Sir Fred remains an adviser to the business and we call on his services as required. This encompasses periods when increased input is helpful and others when we require to call on his services less."

Sources close to Goodwin insisted the relationship had not changed and that he was still an ad hoc adviser to RMJM. © Guardian News & Media Limited 2011 | Use of this content is subject to our Terms & Conditions | More Feeds

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