The luxury Manhattan design firm H. Thomas O’Hara Architect filed for bankruptcy earlier this month, but remains in operation, recent court documents show.
The firm, which designed buildings such as Twenty9th Park at 39 East 29th Street and the Mondrian Hotel at 150 Lafayette Street, filed for Chapter 11 protection Dec. 11 in federal bankruptcy court in Manhattan.
The filings show assets of $1.2 million and debts of $4.3 million. The bulk of the money counted as assets, some $1.1 million, was in unpaid money owed to the firm by clients, the papers show. The largest amount the firm owes was $1.5 million to Citibank Commercial Loan Servicing, while the second largest amount was owed to the Internal Revenue Service for unpaid payroll taxes, totaling $643,166.
The president and managing member of the firm, H. Thomas O’Hara, said in an interview with The Real Deal today that he filed the suit because of the difficult financial pressures brought on by the declining economy.
“Between the downturn in the economy, not getting paid [by clients] and getting hit by these unexpected tax issues, [it] all combined to form a perfect storm from which I intend to land on dry shore,” he said. “We feel strongly we will emerge from this Chapter 11 and be back.”
Architecture firms are under intense financial pressure from the real estate slowdown, as new construction and development has ground to a near halt.
Despite the decline in activity, the 12-year-old firm “has entered into a number of agreements to provide services for projects in 2010,” the papers say.
His company’s revenue has dropped in half, from $5.8 million in 2008 to $2.5 million through mid-December 2009, while at the same time he cut his staff to 14 from 45, court documents show.
O’Hara said the unpaid taxes were discovered after an audit by the IRS, and no penalty was levied.
The company Web site was not functioning today, but O’Hara said it had been working as recently as Friday and said it may be off because of a technical update.