Northwest backed company enters administration

WestCo Medical a northwest fund backed medical device developer has entered administration after it was unable to secure further investment.WestCo Medical developed a product to detect the correct position of a feeding tube in a patient’s stomach.  Administrators have now been appointed and they are now seeking to secure the future of the company’s device.  WestCo Medical has raised more than £1 million through various rounds of funding and has unfortunately found itself in a difficult financial position when trying to secure final round funding.

There are expressions of interest in respect of this product and the administrators are hopeful that they can secure the future for the particular product and see it come through to market.

This highlights the difficulties that companies face when trying to secure funding.  The process is lengthy, time consuming and requires advanced negotiations between the shareholders and the investors. This is unfortunately an administration that is not one of the most common reasons for administration as the economy is climbing out of the recession.  However, this does highlight the implications that can be faced by a company when seeking funding and therefore the importance of obtaining professional advice leading up to the investment and also whilst negotiations are ongoing in respect of that investment and furthermore in respect of any restructuring or insolvency.

On the other side of the coin there has also been a press release today from Clearwater Corporate Finance confirming that deal values has doubled during its financial year which is a positive spin on equity investment highlighting that this can be a positive and viable option.  They have confirmed that private equity continued to be a key source of deal for Clearwater.  They have commented that looking forward they expect the positive sentiment from trade buyers and private equity investors to continue.  This of course is a very positive comment in respect of the equity investment move and therefore this should continue to be a viable option for people when looking for investments.

Should you require any advice in respect of investments, restructuring or insolvency please contact Forbes Solicitors  or call 0800 037 4628 and we will be happy to assist.

Pauline Rigby

About Pauline Rigby

Pauline Rigby is Head of the Corporate and Restructuring team at Forbes Solicitors. Pauline’s blogs cover a wide range of corporate issues, specifically areas including company formation, banking, joint ventures and shareholder matters, contractual matters and equity fundraising or investing.

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