Is there a fast-moving buyer willing to pay at least $2.5 million for the Austin Co.’s main assets?

Potential buyers have until Dec. 16th to submit bids for the main offices of The Austin Co., the Cleveland-based design-build firm that sought protection from its creditors in October. AECOM Technology Corp. has arranged to buy the assets for about $2.5 million, but the bankruptcy code says other offers must be invited and if an offer is competitive the potential buyers square off in an auction.

Related Links: AECOM Buys Offices, Use of Name from Design-Builder Austin, Feb.21, 2005 CH2M Hill Wins Prize In Bankruptcy Contest, Dec. 22, 2003

Austin Co. had been profitable for years and has no bank debt, but last year the company’s Ragnar Benson of Pennsylvania unit became embroiled in an overbudget and late project, draining cash from the company. Now Austin Co. has over $40 million in unsecured creditors, the biggest being St. Paul Travelers, the firm’s surety. But the bonded projects are being split off from the proposed asset sale to AECOM, says Steve Darnell, a principal of FMI Corp., the Raleigh-based financial consultant that is working for Austin Co.

The process is similar to the one in which CH2M-Hill last year acquired the assets of Lockwood Greene, adds Darnell.

The transfer or sale of the remaining assets to AECOM is being challenged by at least one trade creditor, a steel fabricator and erector on a project in Florida. Florida Structure Steel is a subcontractor to Austin Co. on the Cox Target Media Building, a $200-million project in St. Petersburg, Fla. The subcontractor says steel for the project must be delivered by February or it faces liquidated damages of $4,000 a day. But the amount of money that the firm says it is scheduled to receive in the bankruptcy documents, the “cure amount,” falls short of what it is owed.

The biggest question is whether another company will step up to bid on the Austin Co. assets. Prior to the bankruptcy filing, Los Angeles-based AECOM had acquired some of Austin’s business. The remaining assets are basically Austin Co.’s Cleveland headquarters office and its Atlanta and Irvine, Ca., offices.

About 120 employees are involved and a backlog of $70 million, most of it in light manufacturing projects.

A buyer can also purchase the Austin Co. name.

The advertisement for the asset sale only was published about a week ago. Whether another company can evaluate the opportunity in such a small window of time is unclear.

According to bankruptcy court filings, the Austin Co. contacted AECOM prior to filing for Chapter 11 protection in U.S. bankruptcy court in Cleveland. AECOM agreed to pay $2.5 million in cash, plus assumed liability not to exceed $800,000, less a cash advance that Austin received on its contracts and $500,000 held in escrow.