A residential care home in Greater Manchester has received a charitable donation of £500,000 following work by insolvency specialists Smith & Williamson.
Hatton Grange in Hyde was chosen as the beneficiary by the trustees of the Bowlacre Home charity, whose own Hyde-based residential care home closed in November 2018 due to financial difficulties. Bowlacre Home subsequently entered into Administration.
Surplus funds from the subsequent freehold property sales of Bowlacre Home, encompassing the residential care home itself, together with adjoining bungalows and flats, provided the unexpected windfall for nearby Hatton Grange.
Trustees of Bowlacre Home, run by a charity established 65 years ago to provide for elderly care in Hyde, selected purpose-built Hatton Grange as it met their local charitable criteria.
With accommodation for up to 70 residents, Hatton Grange is operated by Anchor Hanover Group, England’s largest not-for-profit provider of housing and care for older people.
The donation was realised through work by Smith & Williamson, which provides restructuring and recovery services and Advisory Consultancy through its departments, led nationally by Greg Palfrey.
At the request of the trustees, Steve Adshead and Mr Palfrey were appointed administrators of Bowlacre Home at the High Court of Justice on 23 November 2018.
Immediately prior to this, the trustees had, in conjunction with Tameside Metropolitan Borough Council and Stockport Council, arranged secured alternative accommodation for all 23 residents.
Although all staff were made redundant, most quickly found employment elsewhere within the care sector – a number moving with residents to their new care homes.
Mr Palfrey, who works out of Smith & Williamson’s South Coast office in Southampton, said: “Despite the best efforts of trustees and staff, Bowlacre Home’s future as a care home was financially untenable, with losses rapidly mounting.
“There was a shortfall in the number of residents needed to meet breakeven and costs were escalating, including higher insurance premiums.
“It was against this testing background that the key source of funds to satisfy creditors’ claims was disposal of the freehold properties.”
A full marketing campaign was undertaken, inviting offers from various types of purchaser, in particular care home operators and property developers.
A number of offers were made to purchase the care home, along with eight bungalows and four flats with live-in tenants. A sale was successfully concluded at a price that provided sufficient funds to satisfy all creditors’ claims.
Bowlacre Home consequently exited administration and entered members’ voluntary liquidation – a process for solvent companies.
Mr Palfrey said: “As we head into spring 2021, all creditors have been paid in full, including statutory interest of 8% per annum. With the surplus funds, Bowlacre Home’s trustees selected Hatton Grange as the beneficiary of a £500,000 donation.
“Whilst it is sad to see the demise of a care home like Bowlacre Home, after decades of caring, trustees can take comfort from the fact that elderly residents in the district will benefit from this surprise windfall.”
He added: “It is satisfying to realise this level of surplus and see it being applied to such good local use - and in trying times.
“I would also like to thank the trustees for their support and understanding during a difficult time for them.”
Bob Smith, Bowlacre Home’s chairman, said: “We are pleased to be able to provide this valuable funding for the provision of older people’s residential care within the local Hyde area.
“My fellow trustees and I feel that this is a fitting conclusion to the work of Bowlacre Home, a charity set up in 1956 to provide assistance to the older people of Hyde.”
Anchor Hanover managing director care services, Mark Greaves, said: “While the circumstances of this donation are extremely unfortunate, we are very grateful and pleased that we will be able to use the funds to enhance the lives of older people living at Hatton Grange for many years to come.”
The £500,000 realisation follows similar work by Mr Palfrey and his team in the charity sector.
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