A subcontractor demanded $3 million be paid - half within 24 hours - the night before a retirement home's abrupt closure that left distressed residents crying and screaming.
As emergency crews tried to help 69 vulnerable residents at Queensland's Earle Haven Retirement Village, the home's millionaire owner and subcontractor's boss argued.
One employee had to be surrounded by police officers after other staff threatened to "punch her head in" if she did not give them patient care folders, ambulance supervisor Cary Strong said.
Mr Strong helped a crying woman comfort her extremely distressed and disorientated mother, a 92-year-old with dementia who desperately wanted the chaos to end.
"She just kept crying and screaming," Mr Strong told the aged care royal commission's Brisbane hearing on Monday.
"She thought her daughter was her mother and kept referring to her as her mother, to please 'stop this'."
After an emergency call to evacuate 'abandoned' residents on July 11, Mr Strong observed several separate "highly emotional and somewhat aggressive interactions" between facility management, staff and residents.
Arthur Miller, who owns the approved aged care provider People Care, and subcontractor HelpStreet's global CEO Kris Bunker argued about who was at fault.
Mr Miller gave HelpStreet one month's notice, on July 8, that it was terminating their agreement over the subcontractor's "very poor" performance managing the residential care facilities at Earle Haven.
"Their (lawyers') idea is there is a time so we can re-hire the employees back to People Care and continue to look after the residents in a proper manner and rectify what was happening with HelpStreet," Mr Miller said.
Mr Bunker confirmed that on July 10, he suggested Mr Miller pay $3 million to resolve their dispute and that he wanted half by midday the following day.
Appearing via videolink from London, Mr Bunker said the demand was "one solution for breach of contract".
"We were concerned with no payment from People Care, that HelpStreet Villages would not be able to trade," he said.
He described the demand, which People Care rejected, as a starting point for discussions with Mr Miller.
Mr Bunker maintained there was no decision by HelpStreet to leave Earle Haven, saying the message to vacate came from People Care.
Mr Bunker defended HelpStreet's removal of the computer server containing patients' records the previous day, saying it was decided the best course of action was to relocate it to a secure location.
Mr Miller told the inquiry he had no idea the facility was being shut down until he saw flashing ambulance and police lights.
Mr Miller accused HelpStreet of removing furniture and equipment to make it harder for People Care to resume operating the business.
"They took even the computers with all the documentation of the residents. They tried to bargain, deal with us for cash to get the thing back."
Senior counsel assisting the commission Peter Gray QC said People Care appeared to have had a poor compliance record since its 2006 approval as a care provider, raising potential red flags about governance and management capacity.
Aged Care Quality and Safety Commission representative Tracey Rees conceded the authority probably should have been more aware of changes in the contractual relationships between People Care and HelpStreet, given People Care's track record.
During questioning, Mr Bunker confirmed he was disqualified from managing a corporation in Australia for three years, as of June last year, but said that fact was disclosed to People Care.