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A company which thought it could make money out
of those who lived on government pensions. This was
more idealistic hope than practical common sense.
It did not work.
The marketplace has conflicts, winners and losers. Village Life is a good example of the uncertainties and problems which beset the elderly when they are unwittingly caught up in marketplace dramas. While corporate dramas frequently impact on services, there are at this time no press reports suggesting that the services provided to residents by Village Life were compromised to meet profits.
What is clear is that large numbers of 80 plus year old seniors and their homes were caught up in dramas and uncertainties which had little to do with them. Management’s efforts and attention have been focused on the business and not on the care and well being of residents. This is a recipe for problems in care.
Village Life adopted a business model which was not financially viable. It illustrates what transpires when the market gets it wrong. What if these had been frail elderly in nursing homes?
Joint managing directors Tony Roberts and John Krimmer started the business in 1998. In December 2003 the company was floated with a glowing prospectus promising rapid growth and profits. Village Life was building budget accommodation for the less affluent sector of Australian society - the sector previously served by a struggling not-for-profit system.
The Village Life Property Trust, the first of its kind in the aged property market, settled fully subscribed.
Apr 2003 A property trust (floated) and an operating company to take the risks
The trust acquired 10 villages and 13 management units across Australia that are managed by Village Life Ltd, one of Australia's largest providers of affordable rental housing for the aged.
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Village Life has entered into 25-year triple net leases with the trust, meaning it will take all occupancy and operational risks of the villages.
Property - Commercial Property - Investing in the aged takes a leap. The Sydney Morning Herald April 12, 2003
For Village Life, which uses a rental model offering affordable accommodation to retirees not in a position to purchase their own unit, ABN-AMRO Morgans has forecast 30 per cent-plus earnings per share growth for financial years 2005-2006.
Feb 2004 Model and profit projections
Age of the village people looms The Australian February 5, 2004
Village Life chairman David Jeffries is bracing for criticism, but points out that governments and charitable organisations simply won't be able to satisfy the "desperate need" for affordable accommodation in future.
Jun 2004 Early criticism
"Everybody wins here," he argues in a pre-emptive strike against critics. "The Government doesn't have to build these sorts of facilities because private capital is doing it, the people investing are making reasonable, not outrageous returns, and those renting the facilities are getting a better environment than they otherwise would have had.
Grey Money The Courier-Mail June 12, 2004
Like the other groups Village Life formed a trust which owned the properties and a separate company to lease and run the facilities. It floated the trust. Several banks took a large holding in the property trust with ING becoming a dominant holder. Village Life also leased and ran retirement homes from a Westpac property trust.
Village Life has just issued the first prospectus of its kind to raise $48.2 million and float 22 of the group's retirement complexes through the Village Life Trust offering investors a tax-deferred yield of 8.5 per cent.
Jun 2004 Growth plans
The company is aiming to double the number of retirement villages to 100 and residents to 5000 by June next year.
Floats to prepare for baby-boom retirees Advertiser, The (Adelaide) June 14, 2004
The Village Life model targeted the less wealthy section of the population, those who could not afford to buy and who lived on pensions. They rented their units by paying 85% of the Age Pension and 100% of the Rent Assistance Allowance leaving residents as little as 15% for living. They were so confident of the demand and that pensioners would do this that they based their calculations on a 95% occupancy.
Village Life operates 43 villages, offering 2151 units that it rents to seniors who are not in a position to acquire a retirement village unit. It is the largest and only group offering this rental model. Tenants' rents are based on a percentage of the Commonwealth government aged pension (85 per cent for singles or 72 per cent for couples) and the Commonwealth government rental assistance allowance.
Apr 2004 The model
Companies set to play greater role in village activities The Australian April 14, 2004
Resident rental fees are charged at 85% of the Age Pension and 100% of the Rent Assistance Allowance. Currently this is a minimum of $230 per week that is automatically deducted from the resident's bank account. The residents receive individual self contained units, three meals a day and laundry services. The village does not supply medical services.
Apr 2004 More about the model
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The key share price driver has been the rapid role out of new villages. Fifty villages with an average of 50 units housing two residents per unit translate to 5,000 pensioners, a minor impact on the total available market of 1m pensioners in 2003.
VILLAGE LIFE (VLL) $2.06 Smaller Companies Guide April 28, 2004
Village Life (VLL) is the only significant listed group building rental accommodation to cater for the 65 and over low income pensioners. Over the next 20 years this market is expected to grow by 70%.
Feb 2005 Only listed operator in this niche
VILLAGE LIFE (VLL) $1.97 Smaller Companies Guide February 9, 2005
From analysts subsequent comments it seems that the model was flawed and that management was one eyed, inexperienced and incompetent. Few spoke out about this at the time.
The analyst never felt comfortable that they had adequate experience and was unhappy that each pocketed a $10.7 million windfall selling down their stake as part of the float rather than ploughing that money back into the enterprise.
Jun 2005 Problems and criticism
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But Goldman Sachs JBWere analyst Craig Temby said the company's appalling recent run "points to a lack of systems and controls within the business" and clearly indicated a broken business model.
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Former Village Life employees have told The Courier-Mail that a poisonous corporate culture has only exacerbated the company's woes.They allege that staff who dared to question, criticise or disagree with senior management were pushed aside in favour of "yes men".
A lack of market research led the company to launch four villages in Toowoomba when there was only enough demand for two, one ex-employee said.
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But, if Village Life survives in its current form, will their scheme continue to be attractive? One criticism of the financing mechanism is that it leaves very little disposable income left over for residents.
Crunch time for Village Life The Courier-Mail June 6, 2005
Because of a building boom, building costs rose steeply. Projects took a long time to complete. Pensioners were not in a position to pay more and if rentals were increased occupancy would have fallen. As it was occupancy was over 10% lower than the calculations used to predict profitability. The company also built in the wrong areas.
The company was soon 80% short of its profit forecasts and not long after was losing money. There were five profit downgrades in rapid succession, some only weeks apart. Trading in shares was repeatedly suspended but each time they resumed share prices plummeted.
Revenue was below prospectus forecast due to delays of the opening of new retirement villages. The number of operational villages at the end of June was 56 with a further ten missing the financial year deadline and opening by the end of August.
Oct 2004 Excuses early on
VILLAGE LIFE (VLL) $2.07 Smaller Companies Guide October 29, 2004
Village Life shares crashed to $2.05 after the group said that its full-year result would be hit by a reduction in development income because of higher construction costs - - -
Feb 2005 Construction costs blamed
Village Life nosedives Australian Financial Review February 3, 2005
Just three months after issuing a full-year profit warning, Village Life went into a trading halt yesterday and a significant downgrade was widely expected.
May 2005 Downgrade
Village Life retires in wake of profit downgrade Australian Financial Review May 6, 2005
"The directors have become aware of information that leads them to believe that the financial forecasts announced to the market on 9 May 2005 for the year ending 30 June 2005 will not be achieved," the company said.
May 2005 Not meeting forecasts
Village Life issues profit downgrade AAP Bulletins May 23, 2005
Village Life was intended to be the shining example of the potential of investing in what should be a growth sector. It listed on the ASX in December 2003 at $1.05 and its shares rose almost 100% in value within five months. Its shareholders have included JP Morgan, AMP Capital and Deutsche Asset Management. Income was to come from renting out accommodation to retirees, who would pay 85% of their pension and all of their rental assistance allowance to Village Life.
Jun 2005 The story and reasons
But profit downgrades have hit the company hard in 2005. The downgrades have been blamed on factors such as delays in building new retirement villages and a rise in construction costs. The company faces the problem of being unable to make money on houses that cost more to build than was forecast; income from residents is not enough to cover loans and operating costs. The company's latest profit downgrade, announced on June 21, stated that net profit for 2004-05 would be between $1.5 million and $1.8 million, down from the prospectus forecast of $15.4 million.
VILLAGE GLEE SOURS BRW June 30, 2005
Almost two years later (after the successful listing), and with four profit downgrades since February alone, Village Life's investors have been burnt. Its shares have slumped about 85% from a high of $2.88 in January to about 47¢. It has had to postpone two retirement village projects, cancel another and sell seven of its villages under construction to the manager of its trust, ING Real Estate.
Aug 2005 Struggling - ING buys villages from Village Life
A tough old market BRW August 4, 2005
Village Life, the stricken developer and manager of retirement villages, has delivered a profit of just $2 million a fraction of the $15.4 million forecast when the group floated in late 2003.
Sep 2005 Woeful profits
Village Life profit falls well short of float forecast Australian Financial Review September 2, 2005
Village Life, Australia's largest commercial provider of seniors rental accommodation, today announced a loss of $692,848 for the three months ended September 30.
Oct 2005 Losing money
Chairman Greg Gardiner warned that Village Life was likely to remain in the red in the second quarter.
Village Life expects to post loss in H1 2005/06 Australian Associated Press Financial News Wire October 25, 2005
Shareholder have commenced a class action accusing management of breaching their duty of continuous disclosure. The tax office has come looking for substantial unpaid tax and this will impact the bottom line
Village Life is also under fire. The former market darling faces a class action that will be financed by the listed litigation funder IMF. The action, brought by aggrieved shareholders, alleges that directors engaged in misleading and deceptive conduct and breached continuous disclosure provisions of the Corporations Act.
Aug 2005 Shareholders sue Village Life
A tough old market BRW August 4, 2005
The Australian Taxation Office is investigating the group's treatment of its villages for GST purposes raising a potential liability of $1,006,000, excluding any interest and penalties.
Sep 2005 Tax Office investigating
Village Life profit falls well short of float forecast Australian Financial Review September 2, 2005
Mr Roberts and Mr Krimmer might also face a class action against Village Life and its directors alleging misleading and deceptive conduct. About 50 Village Life shareholders are expected to file the action in the Federal Court soon, claiming a total loss of about $10 million. The action is being backed by litigation funder IMF.
Mar 2006 Class action
Gordon gets Village Life going Australian Financial Review March 31, 2006
Multinational bankers ING came to the rescue buying some nursing homes, supporting the companies and taking over management. Senior management was replaced and a hard nosed businessman, an accountant, was brought in as Managing Director. The contracts with the trust were renegotiated in order to assist the management company. In the process ING took control. An agreement with another company fell through because of this change.
The other owner of Village Life's facilities Westpac's Property Trust was reluctant to renegotiate its agreements in the same way.
Retirement housing group Village Life and its listed associate, Village Life Trust, could soon be swallowed up by the ING Real Estate group if unitholders approve a proposed change in management.
May 2005 ING takes control
ING may take on running Village Life The Sydney Morning Herald May 10, 2005
Village Life was savaged by the market yesterday after the company sliced its full-year profit expectation by 64 per cent and revealed losses in its rental and management division, as well as significant delays in its development program
May 2005 ING rescues with funds
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However, the company has snared a lifeline from ING Real Estate Investment Management Australia that will provide critical funding for the Village Life Trust which buys properties developed and leased-back to Village Life.
No mercy from investors for Village Life Australian Financial Review May 10, 2005
"This (management control by ING) is to ensure the operations and financing of the trust continues and the 25 retirement villages the trust owns are protected," Mr Thomson said. "As an independent party, we also want to ensure that the bank accounts of the trust are separate from Village Life."
May 2005 Isolating the truts capital from Village Life's problems
Village Life misses third profit forecast The Australian May 24, 2005
Following the takeover of ING Management Ltd as responsible entity for Village Life Trust on June 20, 2005, the trust will purchase seven villages in Geelong, Hobart and Brisbane for $34,830,559.
Jun 2005 ING funds enable growth
ING MANAGEMENT PAYS $35M FOR 7 VILLAGE LIFE DEVELOPMENTS Australian Company News Bites June 23, 2005
Five Village Life Trust directors resigned on June 22, 2005 when ING Management Ltd was appointed responsible entity of the trust and renamed it ING Real Estate Community Living Fund.
Jun 2005 Directors resign and company name changes
FIVE VILLAGE LIFE DIRECTORS DEPART Australian Company News Bites June 29, 2005
John Krimmer and Tony Roberts, the joint managing directors who founded Village Life but then presided over its disastrous float, will step down before the annual meeting in late October and become non-executive directors.
Sep 2005 Founding MDs step down
Village Life profit falls well short of float forecast Australian Financial Review September 2, 2005
Chairman Mr Greg Gardiner today announced the appointment of Mr Stephen Lonie as Village Life's new managing director.
Sep 2005 An accountant becomes MD
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He was formally managing partner for the Queensland operations of the international accounting firm KPMG.
Village Life agreement with Oak Tree Group and ING Ralph Wragg Australian Business News September 20, 2005
The company manages villages for Westpac's $54.8 million unlisted Village Life Property Trust and the listed ING Real Estate Community Living Fund Trust (previously Village Life Trust), which owns $127.6 million of the villages.
Feb 2006 A blunder reviewed
Analysts said one of the major flaws of the company's business model was that it had sold villages to the trusts for inflated prices based on unrealistically high occupancy levels.
Village Life flags fifth profit warning Australian Financial Review February 2, 2006
Mr Lonie said last week's restructuring of an arrangement with trust manager ING Real Estate Community Living Fund had been critical. This saw Village released from some arrangements it had described as "onerous". Village is in discussions with other trust manager Westpac.
Mar 2006 ING renegotiates arrangement
Massive loss plunges Village Life shares into 73% slump The Courier-Mail March 2. 2006
Village Life had been struggling with lease arrangements with the fund (ING Management's Real Estate).
Mar 2006 ING alters lease in return for a bigger stake
So last month, the arrangement was rejigged, including terminating a master lease in exchange for Village handing over almost $6 million worth of stock to the fund.
Landmark Village deal collapses The Courier-Mail March 22, 2006
EMBATTLED retirement home operator Village Life has suffered the collapse of a deal once promoted as offering a "pipeline of properties" with "high-quality" income.
Mar 2006 Troubles cause deals to fall through
Landmark Village deal collapses The Courier-Mail March 26, 2006
If you found the mass of similar names above confusing this might help
In spite of all these measures 2006 sees the management company headed for bankruptcy. The problems in the model were obvious by 2005. ING is looking around for another company to lease and run the facilities. By forming a trust and leaving the management firm to carry the risk, most of the capital invested has been shielded and in theory another management group will move in and protect the residents.
THE business partners who launched Village Life are locked in the fight of their lives to salvage Australia's biggest for-profit provider of rental retirement units.
Jun 2005 Adding up the numbers
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The question analysts are poring over now is whether the company's business model is fundamentally flawed or simply requires a new team at the helm.
----------------------
"The limiting factor is that residents pay 85 per cent of their pension and 100 per cent of their Commonwealth accommodation allowance. So if they're not built for a price that gives you a return, you can't fund them. And if the amount from residents is insufficient to cover operating costs, then you can't make money managing them," the analyst said.
Stock downgraded Village Life on the line Herald-Sun June 6, 2005
Village Life Ltd warned today that occupancy rates and trading performances of its retirement villages have been poor in the past six months.
Feb 2006 Running at a loss
It said the company's standard service accommodation product has not been as popular as expected compared with historical performance levels and as a result it was operating at a loss.
-----------------------
Village Life blamed its plight on a significant increase in competition in the sector, a higher level of federal government support in helping senior Australians find aged accommodation, building villages in wrong locations and competitors who offer a greater security of tenure and greater level of resident independence.It said Village Life residents were typically 80 years and older with 50 per cent leaving within 12 months for health reasons or to find cheaper alternatives.
Village Life warns occupancy rates and trading under pressure Australian Associated Press Financial News Wire February 1, 2006
After requesting a two-week suspension from trading, Village Life managing director Stephen Lonie said he could not guarantee the company could remain a going concern.
Feb 2006 Village Life facing bankruptcy
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Village Life banked on filling 95 per cent of the villages it manages to properly service the fees its paid to the villages' owner, ING Real Estate Community Living Fund. It only achieved average occupancy rates of 84 per cent.
Village Life is close to death The Sydney Morning Herald February 2, 2006
The ING fund, meanwhile, has made back-up plans in case Village defaults, including talking with other operators to assume management of the centres.
Feb 2006 ING making plans in case
Village Life faces share price free fall The Courier-Mail February 3, 2006
At the release of its first-half results on Friday, the fund said it would terminate Village Life's leases at the retirement villages where it was landlord and take on the leases itself. ING has kept Village Life on as operator but plans to change many of the villages.
Feb 2006 ING may take over running of homes and change business model
It will convert some to the deferred-management-fee operating model; it may keep the rental model in others but extend the terms for residents; and it might install nursing homes.
ING fund diversifies Australian Financial Review February 27, 2006
Accountant Johnston Rorke said in an independent review report that there was significant uncertainty about whether Village Life would be able to continue.
Mar 2006 Still at risk
"It was likely that the current valuation base for developed villages would not be sustained," the report said.
Uncertain future for Village Life Australian Financial Review March 7, 2006EMBATTLED retirement home operator Village Life yesterday recorded a $200,000 loss for the first quarter and said it was continuing to attract older residents.
Nov 2006 Large losses
The comments came at an annual general meeting that featured a challenge to the chairman remaining at the Brisbane-based company.
But the board remained positive about Village's future once a vital financial lifeline is found.
Optimistic Village hit with loss The Courier-Mail November 7, 2006
After a further disastrous profit downgrade Village Life shares fell to an all time low of 9 cents (from a one time high of $2.88). In late March 2006 the shares jumped up to 26 cents as two companies moved to buy large holdings at bargain prices.
One of these the MFS Diversified Trust had already entered the retirement market. It now purchased 19% of Village Life. At the same time MFS merged with Villa World, a developer which had followed the Village Life model in retirement villages. MFS also purchased Westpac’s Village Life Property Trust. Village Life had been struggling to negotiate more favourable lease arrangements with Westpac.
The other was Michael Gordon, a multimillionaire who had made a fortune by selling his child care company. He had also purchased retirement village company Sunnycove. His vehicle Bydand purchased a large holding in Village Life from the company's original founders ending with 14%. It seems likely that these two companies were positioning themselves for a takeover battle for Village Life
Babcock and Brown had a 5.3% interest in MFS through their holding in PrimeLife Trust which was a part owner of MFS. MFS also owns part of PrimeLife. Villa World owns 70% of Guardian Group which owns retirement villages. Consolidation seems inevitable to sort out the tangle..
A TRUST linked to Gold Coast financiers MFS has ratcheted up its holdings in troubled retirement home operator and developer Village Life.
Mar 2006 MFS buys
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The trust now owns an extra 3 per cent in Village Life, increasing its holding to 17 per cent.
MFS increases Village stake The Courier-Mail March 9, 2006
Companies associated with founders Tony Roberts and John Krimmer have entered a deed to sell an 11.38 per cent stake in the group to Mr Gordon's private Bydand Capital Pty Ltd.
Mar 2006 Gordon invests
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Last November Mr Gordon lifted his holding in rival listed operator SunnyCove Management to 19.9 per cent. He increased the stake held by Bydand through on-market acquisitions and by participating in a placement of 5.83 million shares at 60¢ each.Mr Gordon is cashed up after selling his Peppercorn child-care company to rival ABC Learning Centres in 2004, a deal that increased his wealth to about $120 million, according to the BRW Rich List.
Gordon gets Village Life going Australian Financial Review March 31, 2006
GOLD Coast-based fund manager MFS Limited continues to creep up the register of troubled retirement village operator Village Life, boosting its holding to 18.8 per cent, just shy of the level at which it would be required to launch a formal takeover.
Apr 2006 MFS buys more
MFS is in a race with Brisbane developer Michael Gordon, who owns 22 per cent of rival seniors operator Sunnycove Management and held 14 per cent of Village Life at the end of March.
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Shares in Village Life, which is facing a shareholder class action, have tripled since the beginning of March, when they resumed trading at 9c after a four-week suspension requested by management.The shares closed on Thursday at 27c, still below the 35c they were trading at before the suspension.
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Babcock holds a 17 per cent stake in Primelife and could emerge with a 5.3 per cent stake in MFS, under a $15 million loan arrangement with private companies linked to chief executive Michael King and managing director Phil Adams.
MFS ups pace in Village race The Australian April 18, 2006
The merger of the aggressive MFS Diversified Trust with residential development group Villa World, flagged on Friday, would create a $300 million Gold Coast-based integrated property group.
Apr 2006 MFS and Villa World merge
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Villa World is a long-established developer with 6000 housing lots in the pipeline in south-east Queensland, Sydney and Melbourne, and a growing aged-care business.
MFS, Villa World merger Australian Financial Review April 22, 2006
WESTPAC is planning to offload 23 retirement properties of embattled Village Life group to a Gold Coast-based funds manager in a deal believed to be worth almost $55 million.
May 2006 Westpac sells to MFS
The deal is the latest involvement that the MFS Diversified Group has in Village Life.
It also owns roughly 19 per cent of shares in the struggling retirement home operator and developer.
Westpac in Village Life asset sell-off The Courier-Mail May 3, 2006
Village Life chairman Greg Gardiner said the company had been advised by MFS Diversified that it would immediately work with Village Life to restructure the current lease agreement.
May 2006 MFS agrees to renegotiate Village Life's lease agreements
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MFS Diversified has also announced that it is in merger talks with Gold Coast developer Villa World, which also has substantial interests in the aged care sector through its 70 per cent holding in the Guardian Group, which owns six retirement villages, is building two more and is laying plans for others.MFS is also a major partner in the PrimeLiving Trust, which was created in October last year when MFS joined forces with investment bank Babcock & Brown and Primelife in a $500 mil-lion plan to buy and run retirement villages in Australia and New Zealand.
MFS swoops on villages The Gold Coast Bulletin May 3, 2006
RETIREMENT home group Village Life's founders have been dumped from the board following the company's past struggles.
Jun 2006 Board changes
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Only three Village directors remain -- managing director Stephen Lonie, pictured, chairman Greg Gardiner and former chairman David Jeffries.
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MFS Diversified this year has picked up 23 Village properties and accumulated a 19.9 per cent holding.
Village Life dumps its founders from board The Courier-Mail June 29, 2006
BRISBANE multimillionaire Michael Gordon has taken another bite out of retirement home company SunnyCove Management, lifting his stake beyond 20 per cent.
Jul 2006 Gordon buys more
Retirement stake lifted The Courier-Mail July 5, 2006
Advertorials show a shift in business strategy. The company which had targeted the pensions of the destitute to whom it offered budget services has changed its tack targeting those who have money. It is urging them to use that money to live better, to invest or to save it for emergencies, rather than tie it up in a retirement home. They can do that by renting from Village Life, where basic services for poor retirees have become "a private furnished villa-unit and courtyard, three home-style meals daily, a weekly linen service and beautifully maintained gardens".
SMART rental options are becoming an alternative to conventional retirement homes in Victoria.
Apr 2006 Promoting rental arrangements
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Residents benefit from a private furnished villa-unit and courtyard, three home-style meals daily, a weekly linen service and beautifully maintained gardens.
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"Renting with Village Life provides the option for residents to free up their capital and save their nest egg investments for longer," he said."Other retirement communities require residents to sign long-term contracts, pay up-front costs, and deferred fees that eat away at their capital.
"At Village Life, residents pay rent instead, with the freedom to leave when they choose without hefty exit fees.
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"Potential residents have the option to bank the money from the sale of their home or earn interest on this money through investments. Most importantly residents should have immediate access to funds for unforeseen medical expenses and changes in their needs."
Low-cost way to enjoy life Geelong Advertiser April 26, 2006
If as the evidence suggests the model is not viable then other management companies will not be interested - or if they are will do no better. ING and MFS will not get the expected lease payments. The viability of the service will be threatened.
If the business model is not viable then what happens to the residents and the rental contracts if the company becomes bankrupt? If the new business model is successful in attracting people who have the money to pay a viable rental what will happen to the unprofitable pensioned residents? They cannot be asked to pay more. Village Life’s founders described this as a "desperate need" for affordable accommodation in future.
Will poor residents be ejected to make room for more profitable citizens? We know that nursing homes in the USA were quite ruthless in the way they avoided admitting and also dumped aged citizens who were no longer profitable. Will government fund a not for profit group to acquire and run facilities for pensioners at a more reasonable rental? Present trends suggest they will not.
This reveals a critical distinction between for profit and not for profit services. Not for profits can go to the community for help and can ask government for assistance in providing basic services to the needy when the funding is inadequate. If the government starts bailing out poor businesses there will be an outcry. As a commercial enterprise Village Life can’t go looking for charity.
Business failure may be manageable in retirement villages with only moderate hardship. The same thing in a large nursing home company would be a disaster - the equivalent of multiple Riverside scandals.
The pressures in the system are for the company to increase occupancy by deceptive marketing but to cut costs and services in order to remain financially viable. Oversight bodies are reluctant to drive companies running essential services into bankruptcy. They turn a blind eye to problems in order to keep the service going. This is the US system and this is what happened in the USA.
Village Life's web site is at <http://www.villagelife.com.au/>
Staff Problems: Concerns about services and unhappy managers emerged. It seems Village Life can't get people to staff its villages.
Nov 2006 Allegations that village managers leaving
MANAGERS of centres at retirement home operator Village Life have been quitting just as a takeover battle heats up.
Brisbane-based Village's executives say the turnover rate is typical for this time of year, but will not confirm how many have left.
The Courier-Mail was given a list of recent resignations, which Village would not confirm.
Retirement firm denies exodus The Courier-Mail November 2, 2006
Dec 2006 No managers at the villages
RESIDENTS of a Toowoomba retirement complex are protesting against service cuts that have left them without an on-site manager for three months and made them fear for their safety.
Residents claim service standards have dropped since August when three of the four Toowoomba Village Life centres were brought under one manager.
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A spokesman for Fair Trading Minister Margaret Keech said the Office of Fair Trading was investigating a complaint by residents that the company's promotional material did not conform with services that were being provided.
Resident Hugh Bingham said standards of care were not enforceable, because of legislative loopholes for rental accommodation, and apparently did not need to be accredited.
" Elderly people are prepared to put up with a lot without complaining because they are frightened they'll be sent away," he said.
Mr Bingham said Village Life's advertising claimed the Village aimed to provide a homely and caring environment.
However, he said the tenancy contract stated Village Life was not a care facility and the company reserved the right to terminate tenancy of residents whose needs it could not meet.
Residents living in fear - Service standards criticised after management centralised The Courier-Mail December 4, 2006
SCV makes Takeover bid: In September 2006 Michael Gordon's Sunnycove (renamed SCV Group) launched a takeover bid for Village Life. MFS refused to sell and blocked the bid. Village Life was going under and elected to sell its management contract to operate ING owned villages to SCV. MFS may well have have refused to accept SCV management for the 10 villages it had purchased from Westpac but we don't know this.
Sept 2006 Takeover bid
Queensland retirement village operator SunnyCove Management Ltd has made an all scrip takeover bid for another retirement village operator, Village Life Ltd.
SunnyCove makes takeover bid for Village Life Australian Associated Press Financial News Wire September 7, 2006
Nov 2006 Village Life accepts
A TAKEOVER offer for embattled retirement home operator Village Life has been endorsed by the board.
But Brisbane-based Village yesterday also revealed it would be defending more lawsuits, including one alleging it had breached a licence agreement and deprived a licensee of development opportunities.
Village Life board endorses takeover The Courier-Mail November 18, 2006
Dec 2006 But SCV abandons when MFS blocks sale
Sunnycove Management relinquished 25,778,228 Village Life shares on December 4, ceasing to be a substantial shareholder.
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As Sunnycove withdrew its offer for Village Life and all acceptance contracts were voided.SUNNYCOVE MANAGEMENT RELINQUISHES 26M VILLAGE LIFE SHARES Australian Company News Bites December 5, 2006
Still struggling: Village Life was struggling to stay solvent while trying to find ways of making money from the villages
Feb 2007 Selling properties
CASH-strapped retirement home operator Village Life is selling off properties and hoping to reap $3.5 million by offloading Victorian real estate.
Village Life plans sale The Courier-Mail February 1, 2007
Feb 2007 Running it as a motel
The 46 unit Village Life complex at the Front Beach will continue to operate partly as a retirement home even though it has now received full approval from the shire council to operate as a motel.
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The complex was given temporary permission last year from the council to operate a motel until May this year.
Village Life sorts out motel parking needs The Bowen Independent February 6, 2007
The management contract: SCV now made
a bid to buy the management contract to operate the villages owned by ING
from Village Life. Village Life accepted
this and
ING
came to
the party leaving MFS out. We do not really know whether this was due to Village
Life, SCV or MFS refusing but it is clear the parties had fallen out.
Village Life then terminated its management agreement to run these villages giving 3 months notice to MFS.
The eviction scandal: MFS did not want to run retirement villages and probably wanted to re-purpose the facilities. It requested that the villages be returned empty. Village Life sent the 400 elderly, mostly pensioner residents in these 10 villages eviction notices.
There was a massive public outcry and multiple parties became involved. MFS retreated and contracted with SCV to operate the villages it owned but by then there had been suffering and extreme anxiety. Many had already left.
Village Life no longer operates retirement villages.
The lack of social responsibility and callous disregard for the frail elderly which these companies displayed is a good illustration of market thinking and particularly of the behaviour of private equity groups.
This sad episode in our social history is analysed in depth on the MFS web page.
Click Here to go to the MFS web page.
Have Village Life's operations have been morally
and ethically questionable all along?
The state opposition alleges that Village Life has been
operating deceptively using a loophole in the law. It never actually said
it was offering retirement
care only short term leases. As a result it did not have to seek accreditation
and
residents
were not protected by retirement legislation. An investigation is under way.
Have government authorities and politicians been turning a convenient blind eye?
Apr 2007 Village Life has been operating unethically using legal loophole - pseudo-retirement villages
The NSW government must urgently investigate the state's retirement villages and close a loophole which may have left thousands of elderly people unprotected by industry regulation, the opposition says.
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But opposition fair trading spokeswoman Catherine Cusack said Village Life had created entire villages based on short-term leases, equivalent to those used in mainstream private rentals.
The short-term leases, which specifically excluded the RVA, allowed Village Life to legally dodge the aged care obligations stipulated under the act, Ms Cusack said.
It also meant that residents with complaints about the level of care they received would only have recourse to the tenancy tribunal, which has no jurisdiction in that area.
Nowhere on its website did Village Life describe its accommodation as "retirement villages", meaning it had broken no law.
Ms Cusack said the exposure of the Village Life complexes as "pseudo-retirement villages" raised the possibility of rogue operators.
" How many of these operators are out there getting themselves exempted from aged care regulations through this loophole?" she said.
Ms Cusack said she believed the government had turned a blind eye to the problem as it provided low-cost housing for pensioners with few assets.
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"The loophole has to close but as a matter of urgency we need to find out how many elderly people are living in our community in what we all think are retirement villages but are in fact unregulated tenancy agreements," Ms Cusack said.
Oppn calls for urgent review of retirement villages Australian Associated Press Financial News Wire April 19, 2006
Apr 2007 Being investigated
Consumer Affairs Victoria (CAV) is pushing ahead with an investigation into any wrongdoing by retirement village operator Village Life.
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"We will, without fear or favour, look at whether any breaches of Victorian law have taken place and the appropriate action will be taken.
"To the extent that there are any policy considerations or other issues we should look at, we obviously don't want to see other residents potentially caught in what are effectively legal battles between the people who own that property and the people who provide the service on that property."
Govt to investigate Village Life affair Australian Broadcasting Corporation (ABC) News April 23, 2007
Management by SCV
SCV Group started off on the wrong foot
by planning to supply all of its villages with frozen food. Once again we
see
the managerial
thinking when dealing with variable human beings in their social
complexity.
This may have been more hygienic, nutritious and even tastier but
the residents
and managers were unhappy. This is about their lives not SCV's profit.
May 2007 Frozen meals from SCV
ONE of Australia's largest retirement village operators will force elderly residents to eat reconstituted frozen food every day in a move that has outraged residents. Sunshine Coast company SCV Group Limited already serves frozen meals to residents of its 16 SunnyCove retirement villages but will extend the frozen food catering to another 90 Village Life retirement villages when it takes over management this month and next month.
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A Village Life site manager, who did not want to be named for fear of retribution, said she and her husband wanted to continue cooking fresh meals for residents but under the new regime it would not be allowed. "Managers are walking out," she said yesterday.
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"We were told the food was being brought in because if anybody got food poisoning it would come back on SCV. "I know residents who left SunnyCove to come to Village Life because of the food and now frozen meals are coming here the residents have handed in their notice to leave."
Frozen meals for life The Courier Mail May 27, 2007 http://www.agedcarecrisis.com/index.php/news/68-media/1999-frozen-meals-for-life
For a good review of the experiences of residents and of investors in Village Life see a transcipt of the ABC radio in depth analysis "The business of retirement" on April 10, 2006
For more articles about Village Life click here
For articles about the new operator of these villages, SCV Group, try here
For Updates:- A good way to check for recent developments in aged care is to go to the aged care crisis group's search page and enter the name of the company, nursing home or key words relating to any other matter in the search box. Most significant press reports are flagged there. The aged care crisis web site has recently been restructured and some of the older links used from this site may not work.
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