A long-standing and historically profitable nursing home with more than 100 beds was operating without the close day-to-day control of the Director or Registered Manager, due to ill health. As a result of poor compliance, the performance of the home had deteriorated steadily for two years, and the home was coming under significant scrutiny from the local authority and Care Quality Commission (CQC).
The Director was reticent to implement any changes, or bring the home’s policies and procedures up to modern day requirements, which meant that the relationship with the local authority and the CQC was moving towards an irrecoverable position. This was exacerbated by the large number of family members employed in the business (more than 20 out of around 90) who were creating a variety of issues. No real disciplinary action had been properly applied to them following significant safeguarding incidents, which had a material and negative impact on wider morale, operational compliance and therefore overall financial performance.
The owner’s emotional investment in the business meant that she strongly resisted any intervention from outside sources, and only reluctantly agreed after the local authority launched a Large Scale Enquiry into the home, and the CQC had carried out an inspection and had downgraded its rating to Inadequate, and also issued a Notice of Proposal to withdraw the home’s registration.
The Director was reluctant to take advice, and especially disinclined to involve their bank, despite the distressed financial position the business was in, and its immediate short-term cashflow needs.
The home lacked any leadership, and the long-term absence of a qualified Registered Manager meant its compliance processes and procedures were no longer fit for purpose. The business also lacked any financial controls, KPIs, or meaningful financial monitoring. As a result of the downgrade in CQC rating, and the Notice of Proposal to withdraw the home’s registration, the cashflow needs of the business became significant and uncertain as an immediate resident embargo was applied. FRP were therefore engaged by the Director and the bank to conduct an independent business review of the current and forecast positions, and provide recommendations for potential exit options.
In conjunction with FRP, care management consultants were engaged to review the home’s systems, compliance policies, procedures and controls, and all parties engaged with the local authority and the CQC in an open and transparent manner. A strategy was developed to rectify the compliance failures, liaise with the CQC and bring the home and business to the market for sale.
An accelerated mergers and acquisitions process was conducted and a buyer secured to redeem the company’s outstanding indebtedness.
A strategy was developed to rectify the problems and bring the home and business to the market for sale.Steve Williams Restructuring Advisory