It would appear that the beginning of the end for troubled home care provider Southern Cross has now been set in motion. The announcement yesterday that the landlords committee had turned their back on the proposals made by the company meant that shares became virtually worthless.
The 31,000 residents and 40,000 plus employees will now be pondering an uncertain future. The massive scale of the company will obviously create major problems in sorting the mess out but it is for sure that the 80 landlords involved will not want to claim on empty property insurance cover for any length of time and will be eager to keep the homes running on an even keel.
Changing hands but not direction
Of course the 80 landlords cover a broad spectrum of property investors. A great number of the 752 homes are owned by companies such as NHP, Four seasons Lloyds and Bondcare who have already indicated that their properties will remain as care homes with new operators brought in or in the case of four seasons taking over the running of business themselves.
Gamble for some
It may prove to be a risky business for some and they will be sure to have consulted with their property insurance brokers before they took the plunge. Landlords owning just one or two of the homes may find it most difficult to manage the changeover seamlessly. Before the collapse this week, in the protracted negotiations with the Landlords Committee, Southern Cross had intimated that at least 30 homes would have to be closed down for the company to remain viable.
It is this figure that remains a worry for both those living in the homes and working in them. The GMB union have already expressed their frustration in not having the chance to represent their member’s interests properly in the talks and have been cutting in their criticism of some of the landlords involved. For those living in the homes, and their relatives, then the situation is even worse. They will be left with an uncertain future until their landlords inform them what exactly the next few weeks holds, but they should take comfort from the fact that any new operators of the homes will have to be passed worthy by the Care Quality Commission.