Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Insolvency definition

What does Insolvency mean? In practice, insolvency describes a financial state where a debtor cannot meet liabilities when due, triggering remedies such as administration, liquidation or bankruptcy and informing directors’ duties and avoidance claims. For companies in England & Wales, Scotland and Northern Ireland, the Insolvency Act 1986, s 123 sets two alternative tests: - Cash‑flow insolvency: an inability to pay debts as they fall due. The inquiry is practical and forward‑looking, not confined to today’s bills (Re Patrick & Lyon Ltd [1933] Ch 786; BNY Corporate Trustee Services Ltd v Eurosail [2013] UKSC 28). - Balance‑sheet insolvency: liabilities (including contingent and prospective liabilities) exceed assets on...

Insolvent Care Homes in England: Enforcement, Sale Structures, CQC Issues, Landlord Considerations, Operating Licences, and Restructuring Plans

Published by a LexisNexis Restructuring & Insolvency expert

Practice notes

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This Practice Note offers direction on taking enforcement action within the care home sector. It explores approaches to shape the sale of an insolvent care home business with regulatory hurdles in mind and signposts risks. It also outlines considerations when preparing a sale agreement for an insolvent care home. The enforcement and sale journey for distressed care homes can be lengthy and strewn with pitfalls. Although this Practice Note points to core matters needing attention, each situation will present its own distinct challenges.

insolvency and the care home industry—overview

Care homes provide housing and personal support for those unable to live independently. Some also deliver care from qualified nurses or specialise in serving particular groups, such as younger adults with learning disabilities. The industry as a whole has suffered significantly in recent years. Challenges persist in parts of the market, especially at the smaller end, reflecting the many operational and financial setbacks providers have faced in recent years, which can disproportionately affect smaller...

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Helena Clarke

Squire Patton Boggs

Helena has over 10 years of experience in the restructuring and insolvency sector, working across default and enforcement, solvent and insolvent restructurings and technical cross-border insolvencies.Helena advises directors of distressed companies and turnaround directors, together with financial institutions, creditors and other stakeholders, as they navigate their way through distress, including defaulting loans, cash flow squeezes, administration, liquidation or receiverships.Helena’s practice also includes various types of financing, including litigation finance, fund finance and art-lending.Helena has been recognised by INSOL International as a rising star in its young practitioner spotlight....

Web page updated on 21/05/2026

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