Order (I) Authorizing
- Date
- 2012-02-29
Summary
An order approving procedures to reject executory contracts and unexpired leases, entered July 11, 2024 as Doc 250 in In re Vyaire Medical, Inc., et al., Case No. 24-11217 (BLS), the Chapter 11 cases in the U.S. Bankruptcy Court for the District of Delaware. The order grants the motion at Docket No. 117 on a final basis and approves procedures under which the debtors file rejection notices identifying each contract, the counterparties, the proposed rejection date and any property to be abandoned, limited to 100 counterparties per notice. Objections are due fourteen days after a rejection notice is served, with at least seven days' notice of any hearing on an unresolved objection. It also provides for abandonment of property under section 554 of the Bankruptcy Code and sets rejection damages claims thirty days after entry of an approving order.
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Case 24-11217-BLS Doc 250 Filed 07/11/24 Page 1 of 7
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
)
In re: ) Chapter 11
)
VYAIRE MEDICAL, INC., et al.,1 ) Case No. 24-11217 (BLS)
)
Debtors. ) (Jointly Administered)
)
) Re: Docket No. 117
ORDER (I) AUTHORIZING
AND APPROVING PROCEDURES TO REJECT EXECUTORY
CONTRACTS AND UNEXPIRED LEASES AND (II) GRANTING RELATED RELIEF
Upon the motion (the “Motion”)2 of the above-captioned debtors and debtors in
possession (collectively, the “Debtors”) for the entry of an order (this “Order”), (a) authorizing
and approving procedures for rejecting executory contracts and unexpired leases, and
(b) granting related relief, all as more fully set forth in the Motion; and upon the First Day
Declaration; and the United States District Court for the District of Delaware has jurisdiction
over this matter pursuant to 28 U.S.C. § 1334, which was referred to the Court under 28 U.S.C.
§ 157 and the Amended Standing Order of Reference from the United States District Court for
the District of Delaware, dated February 29, 2012; and this Court having found that this is a core
proceeding pursuant to 28 U.S.C. § 157(b)(2); and this Court having found that this Court may
enter a final order consistent with Article III of the United States Constitution; and this Court
having found that venue of this proceeding and the Motion in this district is proper pursuant to
28 U.S.C. §§ 1408 and 1409; and this Court having found that the relief requested in the Motion
1 The last four digits of Debtor Vyaire Medical, Inc.’s federal tax identification number are 6495. A complete list
of each of the Debtors in these chapter 11 cases and each such Debtor’s federal tax identification number may
be obtained on the website of the Debtors’ claims and noticing agent at https://omniagentsolutions.com/Vyaire.
The location of Debtor Vyaire Medical, Inc.’s principal place of business and the Debtors’ service address in
these chapter 11 cases is 26125 North Riverwoods Boulevard, Mettawa, Illinois, USA 60045.
2 Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Motion.
Case 24-11217-BLS Doc 250 Filed 07/11/24 Page 2 of 7
is in the best interests of the Debtors’ estates, their creditors, and other parties in interest; and this
Court having found that the Debtors’ notice of the Motion and opportunity for a hearing on the
Motion were appropriate and no other notice need be provided; and this Court having reviewed
the Motion and having heard the statements in support of the relief requested therein at a hearing
before this Court (the “Hearing”); and this Court having determined that the legal and factual
bases set forth in the Motion and at the Hearing establish just cause for the relief granted herein;
and upon all of the proceedings had before this Court; and after due deliberation and sufficient
cause appearing therefor, it is HEREBY ORDERED THAT:
1. The Motion is granted on a final basis as set forth herein.
2. The following procedures (the “Contract Rejection Procedures”) are approved in
connection with rejecting Contracts:
a. Rejection Notice. The Debtors shall file one or more notices, in
consultation with the Required DIP Lenders, substantially in the form
annexed as Exhibit 1 hereto (the “Rejection Notice”), to reject a Contract
or Contracts pursuant to section 365 of the Bankruptcy Code, which
Rejection Notice(s) shall set forth, among other things, with respect to
each Contract listed on the Rejection Notice: (i) the Contract or Contracts
to be rejected; (ii) the Debtor or Debtors party to such Contract; (iii) the
names and addresses of the counterparties to such Contract; (iv) the
proposed effective date of the rejection for such Contract (the “Rejection
Date”); and (v) if such Contract is an unexpired lease, the location affected
by the Rejection Notice and a summary description of personal property to
be abandoned, if any (the “Abandoned Property”). The Rejection Notice
shall also set forth the deadlines and procedures for filing objections to the
Rejection Notice (as set forth below). Each Rejection Notice may list
multiple Contracts; provided that the number of counterparties to
Contracts listed on any one Rejection Notice shall be limited to no more
than 100. For the avoidance of doubt, the Debtors may serve multiple
Rejection Notices, as long as the counterparties listed on each notice are
limited to no more than 100.
b. Service of Rejection Notices. The Debtors will cause each Rejection
Notice to be served (i) via email, if available, and by overnight delivery
service upon (a) the Contract counterparties affected by such Rejection
Notice (each, a “Rejection Counterparty”) at the notice address provided
in the applicable Contract (and upon such Rejection Counterparty’s
2
Case 24-11217-BLS Doc 250 Filed 07/11/24 Page 3 of 7
counsel, if known) and (b) all parties who may have any interest in any
Abandoned Property (if known); and (ii) by first class mail, email, or fax
upon: (a) counsel to the 1L Ad Hoc Group, Gibson, Dunn & Crutcher
LLP, 200 Park Avenue, New York, NY 10166-0193, Attn.: Scott J.
Greenberg (SGreenberg@gibsondunn.com), Jason Zachary Goldstein
(JGoldstein@gibsondunn.com), Joshua Brody
(JBrody@gibsondunn.com), and Kevin Liang
(KLiang@gibsondunn.com); (b) counsel to the 1L Ad Hoc Group,
Pachulski Stang Ziehl & Jones LLP, 919 North Market Street, 17th Floor,
Wilmington, DE 19801, Attn.: Laura Davis Jones (ljones@pszjlaw.com)
and Timothy P. Cairns (tcairns@pszjlaw.com); (c) the United States
Trustee for the District of Delaware, Attn.: Benjamin A. Hackman
(Benjamin.A.Hackman@usdoj.gov); (d) proposed counsel to the
Committee, (i) McDermott Will & Emery LLP, The Brandywine Building,
1000 N. West Street, Suite 1400, Wilmington, Delaware 19801, Attn.:
David Hurst (dhurst@mwe.com) and Maris Kandestin
(mkandestin@mwe.com) and (ii) McDermott Will & Emery LLP, One
Vanderbilt Avenue, New York, NY 10017-3852, Attn: Darren Azman
(dazman@mwe.com) and Kristin Going (kgoing@mwe.com); (e) the
United States Attorney’s Office for the District of Delaware; and (f) any
party that has requested notice pursuant to Bankruptcy Rule 2002
(collectively, the “Master Notice Parties”).
c. Objection Procedures. Parties objecting to a proposed rejection must file
and serve a written objection3 so that such objection is filed with this
Court on the docket of the Debtors’ chapter 11 cases no later than fourteen
(14) days after the date the Debtors file and serve the relevant Rejection
Notice (the “Rejection Objection Deadline”) and promptly serve such
objection on the following parties (collectively, the “Objection Service
Parties”): (a) the Debtors, Vyaire Medical, Inc., 26125 North Riverwoods
Boulevard, Mettawa, Illinois 60045, Attn.: Charles Braley
(cbraley@alixpartners.com); (b) proposed co-counsel to the Debtors
(i) Kirkland & Ellis LLP, 601 Lexington Avenue, New York, New York
10022, Attn.: Joshua A. Sussberg, P.C. (joshua.sussberg@kirkland.com),
Chris Ceresa (chris.ceresa@kirkland.com), and Tiffani Chanroo
(tiffani.chanroo@kirkland.com), and (ii) Kirkland & Ellis LLP, 333 Wolf
Point Plaza, Chicago, Illinois, 60654, Attn.: Spencer A. Winters
(spencer.winters@kirkland.com) and Yusuf U. Salloum
(yusuf.salloum@kirkland.com); (c) proposed co-counsel to the Debtors
(i) Cole Schotz P.C., 500 Delaware Avenue, Suite 1410, Wilmington,
Delaware 19801, Attn: Patrick J. Reilley, Esq. (preilley@coleschotz.com),
Stacy L. Newman (snewman@coleschotz.com), Michael E. Fitzpatrick,
Esq. (mfitzpatrick@coleschotz.com), and (ii) Cole Schotz P.C., Court
Plaza North, 25 Main Street, Hackensack, New Jersey 07601, Attn.:
3 An objection to the rejection of any particular Contract listed on a Rejection Notice shall not constitute an
objection to the rejection of any other Contract listed on such Rejection Notice.
3
Case 24-11217-BLS Doc 250 Filed 07/11/24 Page 4 of 7
Michael D. Sirota, Esq. (msirota@coleschotz.com), Warren A. Usatine,
Esq. (wusatine@coleschotz.com); (d) counsel to the 1L Ad Hoc Group,
Gibson, Dunn & Crutcher LLP, 200 Park Avenue, New York, NY 10166-
0193, Attn.: Scott J. Greenberg (SGreenberg@gibsondunn.com), Jason
Zachary Goldstein (JGoldstein@gibsondunn.com), Joshua Brody
(JBrody@gibsondunn.com), and Kevin Liang
(KLiang@gibsondunn.com); (e) counsel to the 1L Ad Hoc Group,
Pachulski Stang Ziehl & Jones LLP, 919 North Market Street, 17th Floor,
Wilmington, DE 19801, Attn.: Laura Davis Jones (ljones@pszjlaw.com)
and Timothy P. Cairns (tcairns@pszjlaw.com); (f) the United States
Trustee for the District of Delaware, Attn.: Benjamin A. Hackman
(Benjamin.A.Hackman@usdoj.gov); and (g) proposed counsel to the
Committee, (i) McDermott Will & Emery LLP, The Brandywine Building,
1000 N. West Street, Suite 1400, Wilmington, Delaware 19801, Attn.:
David Hurst (dhurst@mwe.com) and Maris Kandestin
(mkandestin@mwe.com) and (ii) McDermott Will & Emery LLP, One
Vanderbilt Avenue, New York, NY 10017-3852, Attn: Darren Azman
(dazman@mwe.com) and Kristin Going (kgoing@mwe.com).
d. No Objection Timely Filed. If no objection to the rejection of any
Contract is timely filed, then the Debtors shall submit a proposed form of
order substantially in the form attached as Exhibit B to the Rejection
Notice approving the rejection of each Contract listed in the applicable
Rejection Notice, for entry by the Court under certification of counsel, and
each such Contract shall be deemed rejected as of the Rejection Date set
forth in the Rejection Notice or such other date as the Debtors and the
counterparty or counterparties to such Contract(s) agree; provided that the
effective date of a rejection of a nonresidential real property lease shall not
occur until the later of (i) the date the Debtors file and serve a Rejection
Notice for such lease, (ii) the Rejection Date set forth in the Rejection
Notice, and (iii) the date the Debtors relinquish control of the premises by
notifying the affected landlord or their counsel in writing (email sufficient)
of the Debtors’ surrender of the premises and turning over, surrendering,
or allowing to be reset, as applicable, the keys, key codes, and security
codes, if any, to the affected landlord.
e. Unresolved Timely Objections. If one or more objections to the rejection
of any Contract(s) listed in the applicable Rejection Notice is timely filed
and properly served as specified above and not withdrawn or resolved, the
Debtors shall file a notice for a hearing to consider the rejection of the
Contract(s) implicated by such objection(s) and shall provide at least
seven (7) days’ notice of such hearing to each objecting party and the
Objection Service Parties. If any such objection is overruled or
withdrawn, the Contract(s) that are the subject of such objection shall be
rejected as of the Rejection Date set forth in the Rejection Notice or such
other date as agreed by the parties or determined by the Court as set forth
in any order overruling such objection.
4
Case 24-11217-BLS Doc 250 Filed 07/11/24 Page 5 of 7
f. No Application of Security Deposits. If the Debtors have deposited
monies with a Rejection Counterparty as a security deposit or other
arrangement in connection with such rejected Contract, such Rejection
Counterparty may not setoff, recoup, or otherwise use such deposit
without the prior approval of the Court, unless the Debtors and the
applicable Rejection Counterparty, in consultation with the Committee
and the Required DIP Lenders, otherwise agree in writing.
g. Abandoned Property. The Debtors are authorized, but not directed, at any
time on or before the applicable Rejection Date, to remove or abandon, at
their option, any of the Debtors’ personal property that may be located on
the Debtors’ leased premises that are subject to a rejected Contract;
provided, however, that to the extent the Debtors seek to abandon personal
property that contains “personally identifiable information,” as that term is
defined in section 101(41A) of the Bankruptcy Code (the “PII”), the
Debtors will use commercially reasonable efforts to remove the PII from
such personal property before abandonment. The Debtors shall generally
describe the Abandoned Property in the applicable Rejection Notice and
their intent to abandon such property. Absent a timely objection, the
described property shall be deemed abandoned pursuant to section 554 of
the Bankruptcy Code, as is, effective as of the Rejection Date. After the
Abandoned Property is deemed abandoned pursuant to section 554 of the
Bankruptcy Code, the applicable Rejection Counterparty or counterparties
may, in their sole discretion and without further order of this Court, utilize
and/or dispose of such property and, to the extent applicable, the
automatic stay is modified to allow such disposition. To the extent
requested by Rejection Counterparty, the Debtors shall be permitted to
abandon the Abandoned Property to such Rejection Counterparty to
facilitate such party’s use or disposal of such Abandoned Property.
h. Proofs of Claim. Claims arising out of the rejection of Contracts, if any,
must be filed on or before the later of (i) the applicable deadline for filing
proofs of claim established in these chapter 11 cases, and
(ii) thirty (30) days after the entry of an order of the Court approving the
rejection. If no proof of claim is timely filed, such claimant shall be
forever barred from asserting a claim for damages arising from the
rejection and from participating in any distributions on such a claim that
may be made in connection with these chapter 11 cases.
i. Removal from Schedule. The Debtors reserve the right to remove any
Contract from the schedule to any Rejection Notice at any time prior to the
date of entry of an order of the Court approving the rejection, and the
Debtors will provide notice (by overnight delivery service at the notice
address provided in the applicable Contract) of such removal to the
relevant Rejection Counterparties.
5
Case 24-11217-BLS Doc 250 Filed 07/11/24 Page 6 of 7
3. Approval of the Contract Rejection Procedures and this Order will not prevent the
Debtors from seeking to reject a Contract by separate motion.
4. Nothing contained in the Motion or this Order, and no action taken pursuant to the
relief requested or granted, is intended as or shall be construed or deemed to be: (a) an
admission as to the amount, validity or priority of, or basis for any claim against the Debtors
under the Bankruptcy Code or other applicable nonbankruptcy law; (b) a waiver of the Debtors’
or any other party in interest’s right to dispute any claim on any grounds; (c) a promise or
requirement to pay any particular claim; (d) an implication, admission, or finding that any
particular claim is an administrative expense claim, other priority claim or otherwise of a type
specified or defined in the Motion or this Order; (e) an admission as to the validity, priority,
enforceability, or perfection of any lien on, security interest in, or other encumbrance on property
of the Debtors’ estates; or (f) a waiver or limitation of any claims, causes of action or other rights
of the Debtors or any other party in interest against any person or entity under the Bankruptcy
Code or any other applicable law.
5. Nothing in the Motion or this Order waives or modifies the requirements of the
Restructuring Support Agreement, including, without limitation, the consent and consultation
rights contained therein.
6. Notwithstanding anything to the contrary contained herein, any authorization
contained herein shall be subject to any interim and final orders, as applicable, approving the use
of such cash collateral and/or the Debtors’ entry into any postpetition financing facilities or
credit agreement, and any budgets in connection therewith governing any such postpetition
financing and/or use of cash collateral (each such order, a “DIP Order”). To the extent there is
any inconsistency between the terms of a DIP Order and any action taken or proposed to be
taken hereunder, the terms of the DIP Order shall control.
6
Case 24-11217-BLS Doc 250 Filed 07/11/24 Page 7 of 7
7. All rights and defenses of the Debtors are preserved, including all rights and
defenses of the Debtors with respect to a claim for damages arising as a result of a Contract
rejection, including any right to assert an offset, recoupment, counterclaim, or deduction.
In addition, nothing in this Order or the Motion shall limit the Debtors’ ability to subsequently
assert that any particular Contract is terminated and is no longer an executory contract or
unexpired lease, respectively.
8. Notice of the Motion as provided therein shall be deemed good and sufficient
notice of such Motion and the requirements of Bankruptcy Rule 6004(a) and the Local Rules are
satisfied by such notice.
9. Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of this Order
are immediately effective and enforceable upon its entry.
10. The Debtors are authorized to take all actions necessary to effectuate the relief
granted in this Order in accordance with the Motion.
11. This Court retains jurisdiction with respect to all matters arising from or related to
the implementation, interpretation, and enforcement of this Order.
Dated: July 11th, 2024 BRENDAN L. SHANNON
Wilmington, Delaware UNITED STATES BANKRUPTCY JUDGE
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