IMS Maxims has been forced to seek the protection of the Irish courts from its creditors.
The High Court in Dublin last week appointed an interim examiner to the group, after saying it was satisfied its companies had a reasonable prospect of surviving as going concerns.
IMS Maxims has been struggling since the spring, when the other main company in a new business that it had entered into went into administration and subsequently became the subject of a Serious Fraud Office enquiry.
The group has been trying to find new investment and to win new business. However, cash flow problems forced it to apply for the examinership last week, and it was granted to avoid “serious safety issues” for patients.
IMS Maxims companies store the medical records of 9.9m people, and the court was told that “serious disruption would ensue if the firms were liquidated. It would not be easy for another supplier to take over and to integrate into the software that the firms provide.”
The court was also told that there would be a deficit of €12m if the firms were wound up, but that if they were allowed to continue as going concerns their assets over their liabilities were worth almost €15m.
Shane Tickell, the chief executive of IMS Maxims, said he hoped the move would prove positive for the company, since it was in some ways analogous to Chapter 11 bankruptcy in the US, which is designed to provide a haven for companies that can go on to be successful.
“Due to financial pressures in the health sectors of our primary markets and ongoing issues with our parent company, we have sought the appointment of an examiner to the group and have financial support to recapitalise the company,” he said in a formal statement. “Throughout the examinership it will be business as usual at IMS.”
IMS Maxims' problems appear to stem from a disastrous link up with a company called Total Asset Finance through an investment vehicle known as Daresbury Asset Group.
EHealth Insider reported in May last year that the two companies would continue to trade independently, but the link-up would give trusts wanting to purchase IMS systems access to financing options; as well as giving the company more money to invest in its products as the healthcare IT market opened up.
However, Total Asset Finance collapsed at the start of this year, and went into administration with debts of £133m owed to the UK arm of a Belgian bank. The debts had nothing to do with IMS Maxims or, indeed, healthcare IT.
Instead, they appear to have been linked to financing for two city-wide cabling projects, in Dundee and Bournemouth. The Serious Fraud Office is investigating.
EHI understands that IMS Maxims has been seeking to extricate itself from DAG, to find new finance and to win new business. An examiner, Eamonn Richardson of KPMG, has now been appointed by the High Court in Dublin as it continues to implement a financial restructuring.
IMS Maxims is headquartered in Dublin and employs 66 people. It is a supplier of IT systems to the public sector in Ireland and the UK.
Some of its most prominent NHS customers include The Royal Cornwall Hospitals NHS Trust and Clatterbridge Centre for Oncology NHS Foundation Trust, while Great Ormond Street Hospital for Children NHS Trust is one of a number of organisations to use its order comms system.
© 2011 EHealth Media.