How Investors Lost £8 Million in Care Home Property Scheme in the UK

There are always a number of controversies within the world of business, and one of the most prevalent recently has been the investors who managed to lose £8 million in a care home property scheme. They were duped into paying out for plans to convert 80 apartments in County Durham. These plans were never going to be completed, as was found out following investigations triggered by insolvency.

Insolvency is a common term where companies can no longer meet the financial obligations they owe to their different lenders and creditors. When they have many debts outstanding and cannot make the right amount of income to pay off these debts, the company is deemed insolvent. Before insolvency proceedings begin, an organisation will probably likely try to set up payment plans with their creditors where they can agree on a monthly amount that will be paid in order to meet their financial liabilities. If no agreement can be made, then insolvency proceedings begin.

As discussed above, insolvency is a state of financial distress where an organisation cannot pay their bills. Insolvency proceedings will often be instigated when a business finds itself in this position, and this involves a few different elements before the company is closed down. One of the main stages is an investigation into the business and how it got into its current financial position. This will mean going through an organisation’s finance and putting together a list of all of its creditors, not to mention looking at the previous happenings of the business. The insolvency proceedings of CHF 9 led to the discovery that the investors of £8 million into the business were paying for plans that were never going to come to fruition.

How Investors Lost £8 Million in Care Home Property Scheme in the UK