With public spending cuts leading to fewer referrals (and a drop in occupancy rates from 92% to 84%), it was forced into negotiations with its landlords for rent reductions and appealed to the government for support.

[2] In early June 2011 it was announced that the company had made its own decision to withhold 30% of rent owed to avoid mass care home closure.

[14] The largest landlord, NHP, owning 250 Southern Cross homes, hired Chai Patel to transfer management to HC-One, a company set up by his old consultancy Court Cavendish.

[17] Media criticism focused on the split from the landlord entity, as the sale and leaseback strategy continued by Blackstone Group had crippled Southern Cross with an unsustainable business model.

Blackstone denied responsibility, stating that the company had been in good order when it sold it five years previously and reaffirmed the 8% reduction in occupancy combined with an 11% increase in management overheads created the cash flow crisis.

[3][4] Late in 2011, two staff at the company's Orchid View care home in Copthorne, West Sussex, were arrested on suspicion of ill-treatment and neglect of residents.

A coroner's ruling in 2013 found that 19 deaths at Orchid View were unexplained, but stated that under Southern Cross' former management the home was "mismanaged and understaffed", and rife with "institutionalised abuse".