Insolvency & Rescue Solutions for the Automotive Sector
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Insolvency & Rescue Solutions for the Care Home Sector
The UK has seen a significant increase in care home insolvencies, with a 30% rise noted over the past year. This surge has led to the closure of an additional 24 care homes compared to the previous year, marking a concerning trend in the care sector.
The financial challenges faced by these care homes are multifaceted, including the burden of high debt levels, rising interest rates affecting mortgages, and the slim profit margins that leave little room for absorbing additional costs. The sector has been particularly hit by escalating expenses, such as those for food and energy, alongside a pronounced staff shortage that has driven up operational costs.
Some sector pressures have their origins before the COVID-19 pandemic. 2011 saw the collapse of the largest chain, Southern Cross, and Four Seasons, another major provider, went into administration in 2019.
Whether larger groups or small independents, care homes are an essential industry, but while it may appear they should be successful – fees can be in excess of £1,000 per resident per week – the reality is that costs are significant and profits can be quickly eroded.
Here at Company Debt, we have significant experience in both closing and restructuring care home sector businesses. Get in touch for a free, no-obligation discussion about your situation with one of our licensed insolvency practitioners.
Automotive Pressure Points
REPUTATION DAMAGE FROM PANDEMIC
REGULATORY PRESSURES
STAFFING CHALLENGES AND RISING WAGES
DEBT BUDENS TO PRIVATE EQUITY
Insolvency Options for the Care Home Industry
If you feel your business is approaching insolvency, you’ll need to be clear about your responsibilities. Once the business is officially insolvent, your responsibilities as director shift towards creditors, not shareholders. If you act in a way which puts any party before your debtors, you may find yourself open to charges of wrongful trading further down the line.
We advise you to take careful advice with an experienced professional such as ourselves, or your accountant. If the business had reached a tipping point, there’s needs to be a clear decision about whether it can be rescued, and how. Or whether the right choice is to opt for voluntary liquidation.
Liquidating a Carehome Business
Voluntary liquidation requires the services of a licensed insolvency practitioner (IP) The IP will deal with creditors on your behalf, sell any corporate assets, then close down the company and divide returns amongst creditors in order of priority. Your powers as a director will cease from the moment of their appointment.
There is also the possibility of a pre-pack sale, a structured debt repayment known as a Company Voluntary Arrangement, or additional financial support utilising debt for equity swaps.
We are fully aware that insolvency processes with respect to carehomes will impact not just directors but the elderly residents themselves. In some cases, processes such as administration can result in the sale of a care home to a third party, minimising the disruption for vulnerable residents.
Rescue, Recovery, and Closure Options for Care Homes
We are fully licensed and accredited insolvency practitioners based in north London, and with decades of combined partner experience in helping directors find positive solutions to business challenges.
Our goal is first to understand your situation as fully as we can, and then to explain the range of options available to you.
We focus on practical advice, without jargon. We practice total transparency around costs and fee structures. Our wish is to support you as fully as possible so that you can emerge from this situation in the best possible situation.
As a first step, simply book in a call with one of our team to learn more about our approach, and to take advantage of a fee consultation that carries no obligation.
Book My Consultation
If you need an experienced insolvency practitioner or business rescue specialist, seek advice now.
- Your free consultation will be led by one of our experienced London insolvency practitioners
- You can speak via phone, online meeting or in person so that we can listen carefully to the facts about your situation
- The team will provide a preliminary view of the likely best outcome, proposed strategy, and the likely cost
- We specialise in helping limited company directors needing immediate professional debt advice
