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VOL. 125 | NO. 159 | Tuesday, August 17, 2010

LRK Works to Rise From Bankruptcy Ashes

By Eric Smith

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Principals of the architectural firm LRK Inc. are from left: Carson Looney, Elaine Covin, Rob Norcross, Frank Ricks, Rebecca Courtney, Tony Pellicciotti, Victor Buchholz.
Photo: Lance Murphey

Many architecture and engineering firms spent the past two years adapting to the changing economic times, but the most prominent example occurred last winter when Looney Ricks Kiss Architects Inc. filed a Chapter 11 bankruptcy petition.

The news sent shockwaves through the industry. If one of the city’s most recognizable and renowned architectural and design companies could crumble and be forced to reorganize, what was in store for other firms as the recession worsened?

Frank Ricks, the firm’s managing principal, said there wasn’t much that could have done to combat such a vicious downturn.

“Perhaps we should have taken some steps earlier,” he said, “but I don’t think anyone expected this one to be so deep and so broad in the marketplace.”

Founded in Memphis in 1983 by Carson Looney, Ricks and Richard Kiss, the firm eventually grew to nine offices and 250 employees. But once financing for private projects dried up, the company saw business slow to a trickle. The company closed offices, but with problems still mounting, Chapter 11 seemed like the only long-term solution.

“It’s really been a process of trying to right-size the firm and restructure in a way that was in the best interest for both our clients and our creditors – as well as us, our employees,” Ricks said. “It’s kind of a balancing act between all of those things. We felt like the path we’ve chosen was the best way to do that.”

Looney Ricks Kiss is now known simply as LRK Inc. and has a decidedly different look. With only 34 employees in four offices – Memphis, Princeton, N.J., Celebration, Fla., and Baton Rouge, La. – the firm is a shell of its former self. Ricks said although the company has shrunk, with much of the reduction coming before the bankruptcy, the firm’s goal remains the same.

“Our focus has been continuing to serve the clients that we have,” he said. “And some of them are beginning to see their situation thaw out a little bit, so we’re seeing some signs of improvement, but I don’t think any of us expect it to be a rapid turnaround.”

Ricks said the company’s principals – Ricks, Looney, Elaine Covin, Rebecca Courtney, Rob Norcross, Tony Pellicciotti and Victor Buchholz in Memphis; Jim Constantine in Princeton; Mark Jones in Celebration; and Mike Sullivan in Baton Rouge – are now resolved to keep the firm’s talented employees and shore up business.

Being able to do that will help LRK slowly “grow back as our client base grows back once things thaw out a little bit more,” Ricks said. When the bankruptcy is complete, which should happen this fall, the old Looney Ricks Kiss Architects will formally dissolve. Then the firm will proceed with the same business as before, just “under the new flag,” Ricks said.

The firm is hopeful for a turnaround. It is seeing some projects that died a year ago resurrected under a new direction. Though they will have to be altered to fit the new financial landscape, the fact that they’re back on the table provides a glimmer of hope for LRK and the rest of the industry. Another advantage for LRK has been keeping four offices open and maintaining a presence in markets that have been more insulated from the economic woes than others.

“We’re trying to respond, hang on to what helped us build the firm over the past 27 years,” Ricks said. “It’s a diversity of project types from single-family housing to corporate headquarters, and then our focus on interior and architecture, and our planning and urban design efforts. Like most architects, we’re looking at all the opportunities that are out there and making the most of them.”

PROPERTY SALES 85 305 21,577
MORTGAGES 62 223 16,417
BANKRUPTCIES 34 138 6,717