BoS took £18.5m hit on Modus Ventures
THE Bank of Scotland took an £18.5m hit on Brendan Flood’s Modus Ventures according to a final report by administrators at KPMG.
The bank, now part of the Lloyds Banking Group, was owed £23.6m when administrators were appointed in May 2009 but only £5.1m has been recovered. Most of this came from loans repaid by Burnley Football Club where Mr Flood is a director.
The administration period was extended in the summer in the hope that some £48.5m owed by some of Modus’ 40 group companies could be recovered.
Salford-based Modus operated by advancing top-up funding to development schemes around the UK being handled by group companies. These companies owned property assets but usually had significant liabilities and other secured funders.
In their final update before the company is put into liquidation the administrators, Paul Dumbell, Brian Green and Richard Fleming, said there had been no further realisations from group companies. However, some cash was clawed back between June and November including £164,000 which made up the Bank of Scotland’s final payment.
The Modus empire began to unravel when Bank of Scotland called in its loan to Modus Ventures. In February eight of the Modus group companies were sold by administrators to Yorkshire-based Scarborough Development Group for £37m.
