The owner of a Hove care home has gone bust after an attempt to sell the debt-laden national business collapsed.
Four Seasons, which owns Bon Accord, in New Church Road, Hove, along with more than 300 other care homes has gone into administration.
It is the second time within a decade that the owner of Bon Accord has gone bust after the previous owner, Southern Cross, collapsed under its debts in 2011.
The home was rated good in a report by the Care Quality Commission (CQC), the official health and care sector watchdog.
Eighteen months earlier, in 2017, the CQC rated Bon Accord inadequate after an inspection during which two residents died.
Four Seasons’ medical director Claire Royston said: “Today’s news does not change the way we operate or how our homes are run or prompt any change for residents, families, employees and indeed suppliers.
“Our priority remains to deliver consistently good care. It marks the latest stage in the group’s restructuring process and allows us to move ahead with an orderly independent sales process.”
The company – Britain’s biggest care home operator – runs 322 homes with about 17,000 residents and patients and several thousand staff.
But the business has been weighed down with debts of more than £500 million and had been put up for sale by its American hedge fund owner H/2 Capital Partners.
It was previously owned by Terra Firma Capital Partners, the private equity firm run by the financier Guy Hands, who bought the business for £825 million in 2012.
He has written off £450 million since buying Four Seasons before his biggest creditor – H/2 Capital Partners – seized control.
As previously with Southern Cross, the huge debts at Four Seasons had been a source of concern for some years.
The company blamed its woes on the low level of fees that councils were willing to pay and rising operating costs, including the introduction of the national living wage.
About 80 per cent of its elderly residents have their fees paid for by the state, with the rest funded privately.
And Four Seasons is not the only care business to have faced financial problems in the recent past, giving rise to wider concerns about how care for the elderly is funded.
Late last year the home care business Allied Healthcare, which looks after 13,000 people, including dozens in Brighton and Hove, blamed low fees paid by councils for its financial misfortunes.
And the CQC even issued a formal notice setting out its doubts about the firm’s financial future.
The company was rescued shortly after by CRG, another home care group, which continues to operate the Allied business under the same name.
GMB national secretary Rehana Azam said: “The possible collapse of Four Seasons shows our care system is in crisis. It is crumbling beneath us because the funding isn’t there.”
Four Seasons appointed professional services firm Alvarez and Marsal (A&M) to handle the administration.
The company said: “The operating companies under which the care home and hospital operations sit are not in administration and continue to be run as normal by the existing leadership teams.”
It said that it had secured funding to ensure continuity of care for residents while it looked for a new owner.
Richard Fleming, of A&M, said: “We are committed to ensuring the group delivers continuity of care as we work to undertake the independent sales process.
“The group has continued to improve its quality ratings across their portfolio of homes and hospitals.
“The group’s operations are fundamentally strong and a successful sales process will enhance those operations’ ability to thrive.”