US employees sue RMJM over $24m Hillier deal
Lawsuit accuses troubled practice of asset stripping and reneging on merger deal.
Troubled architecture giant RMJM is being sued by employees in the United States over claims that it owes them hundreds of thousands of dollars.
According to a lawsuit lodged last month in New Jersey, RMJM director Fraser Morrison and his chief executive son Peter have reneged on the $24 million deal that saw the firm merge with US-based Hillier in 2007.
The news is potentially the biggest blow yet to the Edinburgh-based RMJM, which a year ago appointed the disgraced former RBS banker Fred Goodwin and has since lost dozens of senior staff amid reports of infighting and late payment of salaries.
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 $1.5 million cash bonus pool promised to the employees 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 $8 million from the former Hillier, now known as RMJM Inc.
- Planning to cease “most or all” of its operation in Princeton this month following the closure of Philadelphia operations in June.
- Trying to disguise the fact that 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 $8,000,000 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.”
It added that RMJM had cited “cash-flow difficulties” in its correspondence and noted that Fraser Morrison owns around 10 million company shares and lives in New York, while Peter owns 400,000 shares and lives in Connecticut.
According to BD’s 2011 World Architecture 100 survey, RMJM is currently the eighth largest architect in the world, dropping down from fifth place the previous year.
A spokesman for RMJM said: “We’re surprised and disappointed at this move. However, we fully expect the final $664,000 payment 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.”