United States Bankruptcy Court for the District of Delaware — Case 24-11217-BLS, Doc 345, Vyaire

Summary

Kilmainham Vyaire, LLC objects to the proposed cure amount for an unexpired lease for real property with Debtor Vyaire Medical, Inc. dated August 31, 2022. In the Chapter 11 case of Vyaire Medical, Inc., et al., Case No. 24-11217 (BLS), in the U.S. Bankruptcy Court for the District of Delaware, Debtors' Exhibit A identifies the Lease with a proposed "Cure Cost" of $206,759.32. Kilmainham states that the rent amount currently due is $318,091.64, and that the Debtors also owe unliquidated amounts including late charges and attorneys' fees and expenses. Kilmainham asks the Court to require the Debtors to cure all outstanding defaults prior to assumption. The objection is dated August 1, 2024.

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                 Case 24-11217-BLS              Doc 345       Filed 08/01/24         Page 1 of 3




                        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)

                                                                  Related Docket Nos.: 249, 256, 263 and
                                                                  311


    OBJECTION AND RESERVATION OF RIGHTS OF KILMAINHAM VYAIRE, LLC
                      TO PROPOSED CURE AMOUNTS

         Kilmainham Vyaire, LLC (“Kilmainham”) hereby objects to the alleged cure amount as

set forth in First Notice to Contract Parties of Potentially Assumed and Assigned Executory

Contracts and Unexpired Leases [Dkt. No. 256] (the “Notice”) related to an unexpired lease for

real property between Debtor Vyaire Medical, Inc. and Kilmainham dated August 31, 2022 (the

“Lease”). In support of this objection, Kilmainham further states as follows:

                                        FACTUAL BACKGROUND

         1.       On June 9, 2024, (the “Petition Date”), the Debtors each filed a voluntary petition

for relief pursuant to Chapter 11 of the Bankruptcy Code.

         2.       On July 11, 2024, the Court entered the Order (I) Approving Bidding Procedures

in Connection with the Sale of Substantially All of the Debtors’ Assets, (II) Authorizing the Debtors

to Enter into a Stalking Horse Agreement and Provide Bid Protections, (III) Approving the Form

and Manner of Notice Thereof, (IV) Scheduling an Auction and Sale Hearing, (V) Approving


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.


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Procedures for the Assumption and Assignment of Contracts, (VI) Approving the Sale of the

Debtors’ Assets Free and Clear, and (VII) Granting Related Relief [Dkt. No. 249] (the “Bidding

Procedures Order”).

       3.      The Assumption and Assignment Procedures contained within the Bidding

Procedures Order required the Debtor to file a schedule listing the contracts and leases that may

potentially be assumed and assigned as part of the sale together with providing a “Cure Cost” for

each contract that the Debtors may potentially assume and assign as part of the sale of their assets.

Id.

       4.      On July 11, 2024, the Debtor filed the Cure Notice with Exhibit A [Dkt. 256].

Exhibit A sets forth the contracts that the Debtors may potentially assume and assign as part of

their sale to a third-party buyer. Per the Assumption and Assignment Procedures, Exhibit A also

contains the Debtors’ proposed “Cure Cost” for each contract and lease it will potentially assume

and assign.

       5.      Debtors’ Exhibit A identifies the Lease with a proposed “Cure Cost” of

$206,759.32.

                  OBJECTIONS TO ASSUMPTION AND ASSIGNMENT

       6.      Bankruptcy Code section 365(b) provides in relevant part that the Debtors “may

not assume such contract or lease unless, at the time of assumption of such contract or lease [the

Debtors] (A) cures or provides adequate assurance that the trustee will promptly cure such default;

(B) compensates, or provide adequate assurance that he [debtors] will promptly compensation, a

party other than the debtor to such contract or lease, for any actual pecuniary loss to such party

resulting from such default.” 11 U.S.C. § 365(b).




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        7.      The cure amount under Bankruptcy Code section 365(b) must include all

prepetition and postpetition amounts due under the assumed contract. In re Crown Books Corp.,

269 B.R. 12, 18 (Bankr. D. Del. 2001) (“Landlords were seeking to collect sums due them under

their Leases . . . those actions are compensable under both the terms of the Leases and the

Bankruptcy Code.”).

        8.      The “Cure Cost” identified on Exhibit A does not reflect accurately the amount to

cure all defaults under the Lease. Specifically, the rent amount currently due is $318,091.64. In

addition to the past due monthly rent, the Debtors owe unliquidated amounts including (i) any

Taxes (as defined in the Lease section 4.2) that have accrued but are unpaid; (ii) late charges of

5% plus 12 % interest; (iii) any unpaid amounts under sections 6.1 and 6.2; and (iv) attorneys’ fees

and expenses.

        WHEREFORE, Kilmainham respectfully requests that the Court (i) sustain this objection;

(ii) require that the Debtors cure all outstanding defaults prior to assumption; and (iii) grant such

further relief as is just and proper.

Dated: August 1, 2024                     Respectfully submitted,

                                          /s/ Ericka F. Johnson
                                         Ericka Johnson (DE Bar No. 5024)
                                         BAYARD, P.A.
                                         600 North Market Street, Suite 400
                                         Wilmington, DE 19801
                                         Telephone: (302) 429-4275
                                         E-mail: ejohnson@bayardlaw.com

                                         Counsel to Kilmainham Vyaire, LLC




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