Lyons-Vyaire - Stip for Relief from Stay v3
- Date
- 2024-06-09
Summary
Doc 691-1, filed October 30, 2024 in In re Vyaire Medical, Inc., et al., Case No. 24-11217 (BLS), in the U.S. Bankruptcy Court for the District of Delaware, is a Joint Stipulation Granting Limited Relief from Automatic Stay between the Debtors and Jeffrey Paul Lyons, III, as Administrator of an estate, resolving his motion for relief from stay [Docket No. 589]. The recitals describe a prepetition action filed December 19, 2022 in Gwinnet County, Georgia, Case No. 22-C-07343-S5, which the Defendants contest. Once approved, the plaintiff receives a non-priority general unsecured claim in the amount of any self-insured retention, and Claim No. 72 is deemed amended. The stay is modified solely so the action may continue for recovery from insurance proceeds. It is signed by Cole Schotz P.C. for the Debtors and Hiller Law, LLC for the plaintiff.
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Case 24-11217-BLS Doc 691-1 Filed 10/30/24 Page 1 of 8
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. 589
JOINT STIPULATION GRANTING LIMITED RELIEF FROM AUTOMATIC STAY
The above captioned debtors, Vyaire Medical, Inc., et al., (collectively, the “Debtors”),
on the one hand, and Jeffrey Paul Lyons, III, as Administrator of the Estate of Connita Shontell
Ransom (the “Plaintiff” and together with the Debtors, the “Parties”), on the other hand, hereby
stipulate as follows (the “Joint Stipulation”):
RECITALS
A. On June 9, 2024 (the “Petition Date”), the Debtors commenced voluntary cases
under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United
State Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”).
B. On December 19, 2022, the Plaintiff commenced an action against Debtors
Vyaire Medical, Inc., Vyaire Medical 203, Inc., and Vyaire Medical 211, Inc., and two non-
debtors (the “Defendants”) in the state court of Gwinnet County, State of Georgia, styled as
Conitta Ransom v. Vyaire Medical, Inc., et al., at Case No. 22-C-07343-S5 (the “Prepetition
Action”).
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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EXHIBIT A-1
Case 24-11217-BLS Doc 691-1 Filed 10/30/24 Page 2 of 8
C. The Prepetition Action involves the asserted Incident as set forth in the MFRS (as
defined below).
D. The Defendants deny any liability with respect to, and contest the merits of the
claims asserted in the Prepetition Action.
E. On the Petition Date, the automatic stay imposed by section 362 of the
Bankruptcy Code (the “Automatic Stay”) came into effect, staying certain actions against the
Debtors, including the Prepetition Action.
F. The Defendants are beneficiaries of one or more insurance policies that may cover
damages awarded against it in the Prepetition Action (the “Insurance Policies”).
G. The Plaintiff wishes to pursue potential recovery of the claims asserted in the
Prepetition Action from the Insurance Policies, subject to the limits and terms and conditions of
such policies.
H. Pursuant to the Insurance Policies, the Defendants assert that they maintain a self-
insured retention requirement (“SIR”) before the insurers will cover defense costs, monetary
judgments, or settlements.
I. On October 1, 2024, the Plaintiff filed the Jeffrey Paul Lyons, II’s Motion for
Relief from the Automatic Stay [Docket No. 589] (the “MFRS”).
J. The Debtors contest the relief sought in the MFRS.
K. The Parties desire to resolve the MFRS as provided in this Joint Stipulation.
NOW, THEREFORE, THE PARTIES STIPULATE AND AGREE AS FOLLOWS:
1. The recitals set forth above are hereby made an integral part of the Joint
Stipulation and are incorporated herein.
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2. This Joint Stipulation shall have no force or effect unless and until approved by
order of the Bankruptcy Court (the “Effective Date”).
3. Upon the Effective Date, the Plaintiff is allowed a non-priority general unsecured
claim in the amount of the SIR, if any, under the applicable Insurance Policies (the “SIR Claim”)
to satisfy any SIR component of the Insurance Policies.
4. Upon the Effective Date, (i) any and all claims, proofs of claim, scheduled claims,
administrative claims, motions or requests for payment filed and/or asserted, or which would
have been filed or asserted by the Plaintiff against the Debtors or the Debtors’ estates, including
but not limited to the proof of claim docketed as Claim No. 72 on the Court’s claims register,
shall be deemed amended to reflect a non-priority general unsecured claim in the amount of the
SIR Claim (the “Amended Claim”) and (ii) Plaintiff shall be forever barred, estopped and
permanently enjoined from asserting any further claims against the Debtors other than the
Amended Claim.
5. Upon the Effective Date, with the sole exception of the Amended Claim, the
Plaintiff waives any rights to collect or receive payment, in whole or in part, on account of the
SIR or the Amended Claim from the Debtors or the insurers under the Insurance Policies, or any
of their successors-in-interest.
6. Upon the Effective Date, the Automatic Stay shall be modified to the extent
necessary solely to permit the Plaintiff to continue the Prepetition Action for the purpose of
obtaining recovery from insurance proceeds under the applicable Insurance Policies; provided,
that all other provisions of the Automatic Stay, including, without limitation, those provisions
prohibiting the commencement or continuation of any other judicial proceedings against the
Debtors that was or could have been commenced prior to the Petition Date, and those provisions
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prohibiting any act to collect, assess, or recover a claim against the Debtors that arose prior to the
Petition Date from the respective estates and/or assets or property of any of the Debtors (as
defined in section 541 of the Bankruptcy Code), shall remain in full force and effect. For the
avoidance of doubt, (i) the Plaintiff may continue the Prepetition Action against the Debtors as a
named defendant, but should any allegations result in a judgment, settlement, or other recovery
against the Defendants, no such recovery shall be collectable against the assets of the Debtors
except as provided herein, and (ii) nothing in this Joint Stipulation shall limit the Plaintiff’s
rights against any third-party non-debtor parties in the Prepetition Action.
7. This Joint Stipulation by the Debtors to the modification of the Automatic Stay on
the terms and conditions set forth herein shall not be deemed an agreement by the Debtors to
provide assistance or to cooperate with the Plaintiff in any way with efforts to pursue coverage
and/or a recovery in connection with the Prepetition Action or to secure coverage and/or
payment from the Insurance Policies, if any, on any settlement or judgment arising in the
Prepetition Action. The Plaintiff acknowledges that the Defendants, and their counsel, have not
made any representations or warranties as to whether any of the Insurance Policies provides
coverage or would otherwise provide payment related to the Prepetition Action, and that any
determination made by the Plaintiff as to the availability of coverage or payment from the
Insurance Policies is made wholly on the basis of Plaintiff’s independent investigation. Nothing
in this Joint Stipulation shall provide a basis for or constitute a determination as to the
availability or applicability of coverage or payment by the Insurance Policies or the Plaintiff’s
rights or entitlement to the proceeds of the Insurance Policies. For the avoidance of doubt, the
terms of this Joint Stipulation, including without limitation the waivers set forth herein, are
binding and enforceable on all Parties regardless of whether coverage exists with respect to the
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Plaintiff’s claims and regardless of whether the Plaintiff obtains any recovery under the
Insurance Policies.
8. Nothing contained herein shall be deemed an admission of liability on the part of
the Defendants with respect to the claims asserted in the Prepetition Action or an admission by
the Plaintiff of the validity of any defenses. Nothing in this Joint Stipulation is intended to, or
shall be construed to, waive any defenses, setoffs, objections, counterclaims, or coverage
defenses that the Defendants or the Defendants’ applicable insurance carriers or their
representatives may have with respect to any litigation, current or contemplated, including but
not limited to the Prepetition Action.
9. Any judgment against or settlement with the Debtors in the Prepetition Action
shall be (i) reduced by the Amended Claim as to account for the SIR Claim and (ii) limited to
any available insurance proceeds, up to the available limits of the Insurance Policies.
Notwithstanding the foregoing, nothing in this Joint Stipulation limits the Plaintiff’s right to
recover against third-party non-debtor parties to the Prepetition Action, including but not limited
to their respective insurance coverage(s).
10. To the extent that a judgment or settlement is not fully satisfied by available
insurance proceeds of the Insurance Policies, if any, the Plaintiff hereby waives any claim
(except the Amended Claim) against the Debtors and agrees that he will not seek in any manner
to receive distribution of money or property of or from the Debtors or any of their debtor-
affiliates or successors-in-interest, except on account of the Amended Claim.
11. Nothing herein (i) alters, amends or otherwise modifies the terms and conditions
of any Insurance Policies issued to the Defendants, or held on behalf of the Defendants, or of any
related agreements; (ii) creates or limits a direct right of action by the Plaintiff against any
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insurers; (iii) precludes or limits, in any way, the rights of any insurer to contest and/or litigate
the existence, primacy and/or scope of available coverage under any allegedly applicable policy
or to otherwise assert any defenses to coverage; or (iv) constitutes a determination or admission
that coverage exists with respect to the Plaintiff’s claims.
12. This Joint Stipulation is without prejudice to any claims of the Defendants that
they are not required to satisfy any SIR that are or may be required under the Insurance Policies,
or any other claims of the Defendants against the insurers, including any claims, rights, or
defenses of the Defendants arising under the Bankruptcy Code, or arising in, or related to, the
chapter 11 cases.
13. Nothing contained herein shall be construed as a waiver by the Debtors or any
other party in interest of their right to object to any and all proofs of claim relating to the
Prepetition Action or any other action to which the Debtors are a party that may be filed in the
chapter 11 cases.
14. Neither this Joint Stipulation, nor any terms contained herein, shall be offered or
received in evidence or in any way referred to in any legal action or administrative proceeding
among or between the Parties hereto, other than as may be necessary: (a) to obtain approval and
to enforce this Joint Stipulation; or (b) to seek damages or injunctive relief in connection
therewith.
15. This Joint Stipulation shall constitute the entire agreement and understanding
of the Parties relating to the subject matter hereof and supersedes all prior agreements and
understandings relating to the subject matter hereof.
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16. The undersigned who executes this Joint Stipulation by or on behalf of each
respective Party represents and warrants that he or she has been duly authorized and empowered
to execute and deliver this Joint Stipulation on behalf of such Party.
17. This Joint Stipulation may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same instrument, and it
shall constitute sufficient proof of this Stipulation to present any copies, electronic copies, or
facsimiles signed by the Parties here to be charged.
18. This Joint Stipulation shall not be modified, altered, amended or vacated without
the written consent of all Parties hereto or by further order of the Bankruptcy Court.
19. Notwithstanding the applicability of Federal Rule of Bankruptcy Procedure
4001(a)(3), the terms and provisions of this Joint Stipulation immediately shall be effective and
enforceable upon the Effective Date, and shall thereafter be binding upon the Parties hereto and
their respective affiliates and successors.
20. Each Party represents and warrants to the other Party that it: (a) made this Joint
Stipulation freely and voluntarily and with full knowledge of its significance; and (b) has been
represented by counsel of its own choice in the negotiations preceding the execution of this Joint
Stipulation and in connection with the preparation and execution of this Joint Stipulation.
21. The Bankruptcy Court shall retain jurisdiction to resolve any disputes or
controversies arising from this Joint Stipulation.
22. This Joint Stipulation may be filed in any court of competent jurisdiction as
evidence that the Automatic Stay in the above-captioned chapter 11 cases has been modified for
cause, as provided herein, under section 362(d)(1) of the Bankruptcy Code.
[Remainder of Page Intentionally Left Blank – Signatures to Follow]
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Case 24-11217-BLS Doc 691-1 Filed 10/30/24 Page 8 of 8
Dated: October __, 2024
/s/
COLE SCHOTZ P.C.
Patrick J. Reilley, Esq. (No. 4451)
500 Delaware Avenue, Suite 1410
Wilmington, Delaware 19801
Telephone: (302) 652-3131
Email: preilley@coleschotz.com
Co-Counsel for the Debtors and Debtors in
Possession
/s/
HILLER LAW, LLC
Adam Hiller, Esq. (No. 4105)
300 Delaware Avenue, Suite 210, #227
Wilmington, Delaware 19801
Telephone: (302) 442-7677
Email: ahiller@adamhillerlaw.com
Counsel for the Plaintiff
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