Care homes operator Four Seasons Health Care has collapsed into administration, raising fears for thousands of elderly residents.
Four Seasons, which houses 22,000 people in 322 homes, insisted residents would be unaffected by the move.
The collapse is the biggest care homes failure since Southern Cross went bust in 2011.
Group medical director Dr Claire Royston said: "Today's news does not change the way we operate or how our homes are run or prompt any change for residents, families, employees and indeed suppliers.
"It marks the latest stage in the group's restructuring process and allows us to move ahead with an orderly, independent sales process."
Four Seasons has been hit by rising costs and deep cuts to the fees local authorities pay care homes.
The GMB union said the government needed to step in urgently to reassure Four Seasons staff and residents.
Rehana Azam, GMB national secretary, said: "The possible collapse of Four Seasons shows our care system is in crisis, it is crumbling beneath us because the funding isn't there."
“Lack of funding in the care sector is putting the profession - and all of our futures – in serious danger."
Insolvency specialists Alvarez & Marsal (A&M) will carry out the administration process which comes after an attempted sale was aborted. A&M will now attempt to sell the group out of administration.
Late last year, US hedge fund H2 Capital Partners, which effectively controls Four Seasons, ordered a sale of the crisis-hit company, which is struggling under a £525m debt mountain. The bulk of the debt is held by H2, which is run by Spencer Haber.
Only weeks ago, Four Seasons insisted that it had “sufficient operating liquidity” to be able to complete the sale process.
Ms Royston said: “Our priority remains to deliver consistently good care. It marks the latest stage in the group's restructuring process and allows us to move ahead with an orderly, independent sales process.”
But the failure of Four Seasons caps a sorry saga for the group, which had been owned by Guy Hands' private equity vehicle Terra Firma.
Richard Fleming, of A&M, said: “We are committed to ensuring the group delivers continuity of care as we work to undertake the independent sales process.
“The group has continued to improve its quality ratings across their portfolio of homes and hospitals.
“The group's operations are fundamentally strong and a successful sales process will enhance those operations' ability to thrive.”
Additional reporting by agencies
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