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Anorak | What a silly complaint about the Southern Cross collapse

What a silly complaint about the Southern Cross collapse

by | 12th, November 2012

PA 10880367 What a silly complaint about the Southern Cross collapse

SOUTHERN Cross was, as you will remember, the care homes company that went bust. At the time it did there were great wailings that the elderly would be thrown out on hte street and how this proved private profit making was just appalling. Man.

Of course what actually happened is that the people who owned the care homes simply found another manager and no one was moved at all. Just the shareholders in Southern Cross lost all their money for the mistake of hiring the wrong people using the wrong business model. Which is exactly the way this capitalism shtick is supposed to work.

Now we’ve got the next stage of the whining:

The taxpayer-backed Lloyds Banking Group could shortly find itself the owner of a string of care homes housing many thousands of Britain’s most vulnerable elderly residents, as a second wave of financial troubles hits companies linked to failed Southern Cross Healthcare.

Through its notorious Bank of Scotland corporate lending unit, then headed by Peter Cummings, the bank was among a handful of lenders who became rapidly interested in the care home sector before the advent of the credit crunch in 2007.

The banks lent the money to the firms that actually owned the homes, the firms that then used Southern Cross as their manager. With Southern Cross bust the new managers have been saying we can’t pay quite so much rent. Thus the mortgages on those homes are not getting fully paid and so the companies that own the actual homes might go bust.

Apparently all of this is very bad but I cannot work out why. If the company that owns the homes go bust then one of two things will happen. Either someone else will buy them (at a low price, to be sure) or the banks will own them. Absolutely no one at all is suggesting that the bankruptcy of the company means the residents will be thrown onto the streets. And note: it’s another company that runs the homes.

And if the banks end up owning them? As is noted these are largely state owned banks. And so it will largely be the state that owns them. And isn’t that what people want anyway? Especially after the capitalist b***ards have lost all their money to boot?



Posted: 12th, November 2012 | In: Money Comment | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink