Two holding companies behind Four Seasons Health Care have gone into administration.
The groups run Balmoral Care Home in Woodhouse, Sheffield and Layden Court Care Home in Maltby, Rotherham.
Nationwide the group have around 17,000 residents and 20,000 staff.
However, the group have confirmed no homes will be closing.
Dr Claire Royston, Group Medical Director, 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.”
The GMB Union has said that funding cuts has heavily affected care homes.
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.”
Consulting firm Alvarez & Marsal (A&M) will attempt to sell the company out of administration.
Four Seasons is currently £525m in debt, however.
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.”