CARE home operator Southern Cross is to close down after the landlords of its properties abandoned the company.

The company confirmed yesterday that it is taking steps which will lead to an “orderly closure” of the group’s affairs.

It meant staff and residents at more than 500 care homes were left unsure over who would be running them after Southern Cross announced plans to shut down.

The cash-strapped operator, which has 752 homes and 31,000 residents, is to close after landlords refused to restructure rental agreements.

Landlords of 250 homes have agreed to take them back and run them themselves, but negotiations are still on-going with the owners of the other 502, a process that could take three to four months, it is understood.

The firm said final details of the plan have yet to be settled, but all payments to trade creditors and staff are to be maintained to help with the transition to new owners or operators and keep continuity of care.

Southern Cross is the UK’s largest care home operator, but ran into a financial crisis brought on by a rising rent bill and lower fees as occupancy rates declined and local authorities reduced the number of patients they placed with the group.

For some weeks it has been locked in negotiations over a restructuring of property arrangements.

It negotiated a 30% rent cut for four months while the talks continued, but though some landlords had been expected to take back their properties, today’s announcement that all had decided to walk away was a surprise.

In Huddersfield, the firm runs Abbey Place Care Centre, Fartown; Alwoodleigh Care Centre, Edgerton; Botham Hall, Milnsbridge; Bryan Wood Care Centre, Edgerton; and Astley Grange, Fartown.

It added that it is expected the existing group will cease to be an operator of homes at the end of the restructuring period. The company’s shares have been suspended with immediate effect.

A number of landlords, who are also operators of care homes, have indicated they intend to take over the running or have found new operators for 250 out of the 752 homes and will start to transfer operations shortly.

Landlords of the other 502 homes are said to be finalising their plans.

Some may require operational management and back office support, Southern Cross said, but once the restructuring period is over it anticipates it will “cease to be an operator of homes”.

Shareholders will get nothing back, it added, with shares suspended on the Stock Exchange today.

Have you a relative in a Southern Cross home and, if so, are you worried about the future of the company? Contact the newsdesk on 01484 437712 or email