Modulous enters liquidation after buyer deal fails to materialise

Failed modular housing business Modulous has been placed into voluntary liquidation.

Housing Today has seen a letter sent to employees on 26 January from liquidators Opus Restructuring.

The move comes almost three weeks after Modulous’s chief executive officer Chris Bone said the business would enter administration, but the paperwork wasn’t subsequently filed.

All 50 staff at the off-site housing firm were made redundant at the end of November and it issued a notice of intent to enter administration.

Housing Today understands that this notice of intent was extended more than once as Modulous attempted to find a buyer for some of its assets.

An email sent to staff this morning from Bone confirmed that a deal had fallen through.

Bone wrote in his update to former Modulous staff that since 6 December he has been in negotiations with “a business which was interested in buying our software as it will be a synergetic bolt-on for them,” adding that this was “a deal which has, for a number of reasons, taken some time to close.”

Bone added: “Unfortunately, in the last week, it became clear that some additional risks to the business had arisen and, as a result, the buyer felt that they would prefer not to acquire the business out of administration and left the board no alternative but to quickly move to liquidation proceedings.” 

Bone wrote that Modulous had appointed Opus Restructuring to undertake the preparation for liquidation on Friday afternoon.

>>See also: Modulous delays entering administration as CEO forms new business

>>See also: ‘It’s been a torrid time’: Modulous boss Chris Bone on the offsite housing firm’s collapse

>>See also: Modulous set to go into administration

>>See also: Briefing: Modulous, the MMC provider without a factory

The letter from Opus to former Modulous employees and other creditors invites them to attend a virtual creditors’ meeting on 8 February. It also asks them to approve the liquidators’ fees of £27,260.

Bone told Housing Today he was “nothing to do with the delay entering administration.”

He said, “I have been the one pushing the deal through. Sadly just not as quickly as everyone needed.”

In early January, Bone confirmed that the firm collapsed with debts of £4m.

Staff have not received final salaries for November and are believed to be owed four months of pension contributions.

Bone’s reference in his email to a deal to buy the firms’ software “out of administration” comes despite Opus and the Insolvency and Companies List (formerly known as the Bankruptcy Court) confirming last week that the firm was not formally in administration.

Founded in 2018, Modulous consisted of a physical kit of parts that could be used to deliver housing, and a digital design tool called TESSA – an acronym for Tech Enabled Solutions for Sustainable Architecture – which launched in October, and is believed to have been the subject of the deal referenced by Bone.

It is the latest modular business to fail, following Ilke Homes, House by Urban Splash and last year’s closure of Legal&General’s modular arm.

In early January Bone blamed “the vagaries of the venture capital markets” for the firm’s collapse, claiming it had had £30m of pledged funding, but when one funder pulled out and the remainder prevaricated the business “couldn’t bridge the gap”.