Seattle Art Museum sues MOD Systems over unpaid rent

The former home of MOD? (Photo via Wikipedia)

Troubles continue to mount for MOD Systems. The Seattle Art Museum has filed a lawsuit against the maker of digital media kiosk technology for failing to pay rent on the museum’s property at 1301 Second Avenue. MOD signed a lease agreement with the museum on November 11th, but since occupying the office space on January 1st it has continuously missed monthly rental payments, GeekWire has learned.

According to the suit, the monthly lease payment for the fifth floor office space is $40,333. But since taking occupancy, the company has only paid a partial payment of $30,000 toward one month.

The situation escalated on April 7th when SAM provided notice to MOD that the company would have to either pay the remaining rent or be forced to vacate the building within three days.

“MOD Systems is in default for failing to timely pay rent for January, February, March or April, 2011,” the suit says.

MOD entered into a 2-year lease agreement with the museum for the office space in the building, formerly the home of Washington Mutual and now known as the Russell Investments Center. (Zillow.com plans to move onto floors 29, 30 and 31 of the building later this year),

Around the same time that the museum asked the company to vacate or pay, MOD announced that it was placing many of its employees on leave.

The Seattle Art Museum’s suit is not the only pending litigation against the company. Last month, Seattle-based Screenplay sued MOD for failing to pay $13,276 related to unpaid work tied to movie trailers.

Despite raising more than $40 million from the likes of Toshiba and NCR, including a $5 million round last September, MOD’s history has been marred with litigation,  controversy and layoffs. The company’s co-founder, Mark Phillips, was convicted last month for wire fraud, mail fraud and money laundering related to his activities at the company.

Phillips is no longer involved at MOD, which is led by former Microsoft executive Anthony Bay.

We’ve reached out to Bay for comment about the recent litigation.

John Cook is co-founder of GeekWire. Follow on Twitter: @geekwirenews and Facebook.

  • Corvid60

    MOD CEO Anthony Bay is the Bernie Madoff of Seattle; everything he touches turns to digital dust and fat fees for lawyers. Netflix, Amazon, and Hulu have already consumed any chance that MODs exceedingly trailing edge technology will go anywhere. Anthony will resurface somewhere else with his next big pitch (or should I say Sting). I just hope investors large and small will review MODs history as a cautionary, creepy investing lesson. To John Cook: I’d suggest keeping an eye on what Anthony is up to in the years to come, from whatever sources you have. Wherever Anthony “Madoff” Bay goes, digital downfall and squandered cash is sure to follow.

  • VernoSystems Employee

    Mark Phillips and Anthony Bay are one in the same. Both bags of garbage deserve to end up in prison.

    I can that these first two lawsuits are the begining of dozens. I don’t think the shafted investors have forgotten what fuduciary duty is. Mark Phillips has been in prison for a year… using that excuse is old news.