Insights
14 Sept 23
What action should directors take when their business encounters financial difficulty?
Oliver Nelson and Charles Boyne
The Weightmans team acted for Oldham Total Care Limited (OTCL), a wholly owned subsidiary of Oldham Metropolitan Borough Council.
A multi-disciplinary team from national law firm Weightmans acted on an urgent purchase through administration of certain business and assets of Chadderton Total Care Limited, a care home in Chadderton, Oldham for Oldham Total Care Limited (OTCL), a wholly owned subsidiary of Oldham Metropolitan Borough Council.
The Weightmans team, led by Partners Charles Boyne and Mike Clifford, worked closely with Oldham MBC’s team in providing a legal solution to the deteriorating financial condition of the existing care provider and safeguarding the continued provision of services to 100+ vulnerable residents and preserve the employment of circa 200 employees.
The detailed terms and conditions of the purchase were negotiated and agreed over an intense couple of weeks culminating in the sale to OTCL immediately after the existing provider was placed into administration on 26 July 2023. The purchase is conditional upon OTCL securing a Care Quality Commission registration and in the interim management arrangements have been put in place to ensure the proper running of the care home. Addleshaw Goddard acted for the administrators, BDO LLP.
The leader of Oldham MBC, Arooj Shah said: “Acquiring the home is not a decision we’ve taken lightly but the alternative was cruel, with job losses for hardworking staff, vulnerable people being forced to move and the wider risk to patient care in Oldham. We’ve taken this action to make sure this doesn’t happen.”
The upheaval for vulnerable residents and their families, the loss of community jobs and the significantly increased costs of provision for the local authorities all weighed heavily on Oldham MBC in making the decision.
Charles Boyne said: "This was a transaction which required a rapid turnaround in order to safeguard the position of the residents in the immediate term. All the professional advisers (including the main stakeholders at the Council) across the piece were aligned in respect of the need to find solutions pragmatically and speedily to the developing risks of closure."
