Motion Of Debtors For

Source document: Motion Of Debtors For; document type: motion (first-day motion re utility service adequate assurance, 11 U.S.C. § 366).

Full text

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 (___)
)
Debtors.
)
(Joint Administration Requested)
)
MOTION OF DEBTORS FOR
ENTRY OF INTERIM AND FINAL ORDERS
(I) APPROVING THE DEBTORS’ PROPOSED
ADEQUATE ASSURANCE OF PAYMENT FOR FUTURE
UTILITY SERVICES, (II) APPROVING THE DEBTORS’ PROPOSED
PROCEDURES FOR RESOLVING ADDITIONAL ASSURANCE REQUESTS,
(III) PROHIBITING UTILITY PROVIDERS FROM ALTERING, REFUSING
OR DISCONTINUING SERVICES, AND (IV) GRANTING RELATED RELIEF
The above-captioned debtors and debtors in possession (collectively, the “Debtors” and,
each, a “Debtor”) state as follows in support of this motion:2
Relief Requested
1.
The Debtors seek entry of interim and final orders, substantially in the forms
attached hereto as Exhibit A and Exhibit B (respectively, the “Interim Order” and
the “Final Order”), (a) approving the Debtors’ proposed adequate assurance of payment for future
utility services, (b) approving the Debtors’ proposed procedures for resolving additional adequate
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’
proposed
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
A detailed description of the Debtors and their business, including the facts and circumstances giving rise to the
Debtors’ chapter 11 cases, is set forth in the Declaration of John Bibb, Group Chief Executive Officer of Vyaire
Medical, Inc., in Support of Chapter 11 Filing and First Day Motions (the “First Day Declaration”), filed
contemporaneously herewith and incorporated by reference herein.  Capitalized terms used but not otherwise
defined herein shall have the meanings ascribed to them in the First Day Declaration.
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assurance requests, (c) prohibiting utility providers from altering, refusing, or discontinuing
services, and (d) granting related relief.  In addition, the Debtors request that the Court schedule a
final hearing approximately 21 days from the Petition Date.
Jurisdiction and Venue
2.
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 United States Bankruptcy Court
for the District of Delaware (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.  The Debtors confirm their consent, pursuant to rule 9013-1(f) of the Local Rules of
Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of
Delaware (the “Local Rules”), to the entry of a final order by the Court in connection with this
motion to the extent that it is later determined that the Court, absent consent of the parties, cannot
enter final orders or judgments in connection herewith consistent with Article III of the United
States Constitution.
3.
Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409.
4.
The statutory bases for the relief requested herein are sections 105(a) and 366 of
title 11 of the United States Code, 11 U.S.C. §§ 101–1532 (the “Bankruptcy Code”), rules 2002,
6003, and 6004 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), and Local
Rules 2002-1 and 9013-1.
Background
5.
Vyaire Medical, Inc., together with its direct and indirect subsidiaries (collectively,
“Vyaire” or the “Company”), is a global company focused on developing products and providing
related services for the diagnosis, treatment, and monitoring of various cardiology, pulmonology,
and respiratory health conditions.  With a 70-year history of pioneering breathing technology, the
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integrated solutions offered by the Company help enable, enhance, and extend
lives.  Headquartered in Mettawa, Illinois, Vyaire operates approximately 27 offices and
manufacturing facilities, and employs approximately 950 individuals around the world.
The Company has a global reach, and Vyaire products are available in more than 100 countries.
Its customers are the hospitals, health centers, and private practice facilities delivering
life-enhancing products and services to patients every day.
6.
On June 9, 2024 (the “Petition Date”), Vyaire Medical, Inc. and certain of its
subsidiaries filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code.  The
Debtors are operating their business and managing their property as debtors in possession pursuant
to sections 1107(a) and 1108 of the Bankruptcy Code.  Concurrently with the filing of this motion,
the Debtors filed a motion requesting procedural consolidation and joint administration of these
chapter 11 cases pursuant to Bankruptcy Rule 1015(b).  No request for the appointment of a trustee
or examiner has been made in these chapter 11 cases, and no official committees have been
appointed or designated.
Utility Services and Proposed Adequate Assurance
I.
The Utility Services and Utility Providers.
7.
In the ordinary course of their business, the Debtors obtain electricity, gas,
telecommunications, water, waste management (including sewer and trash) and other similar
services (collectively, the “Utility Services”) from a number of utility providers or brokers
(collectively, the “Utility Providers”).  A nonexclusive list of the Utility Providers and their
affiliates that provide Utility Services to the Debtors as of the Petition Date (the “Utility Providers
List”) is attached hereto as Exhibit C.3
3
The inclusion of any entity on, or the omission of any entity from, the Utility Providers List is not an admission
by the Debtors that such entity is, or is not, a utility within the meaning of section 366 of the Bankruptcy Code,
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8.
Pursuant to the leases for several of the Debtors’ rental properties, certain Utility
Services are billed directly to the Debtors’ landlords and passed through to the Debtors as part of
the Debtors’ lease payments in accordance with the applicable lease agreements.
9.
Uninterrupted Utility Services are essential to the Debtors’ ongoing business
operations and, hence, the overall success of these chapter 11 cases.  The Debtors’ business
operations require uninterrupted electricity, telecommunications, internet, heat, water, and other
utility services to operate.  Specifically, the Debtors must maintain constant communication with
their customers to properly serve their needs, which requires a dependable provision of Utility
Services.  Additionally, the Debtors are a services provider and require workable office space with
continued utility services to properly operate their business.  Should any Utility Provider refuse or
discontinue service, even for a brief period, the Debtors’ business operations would be severely
disrupted.  Such disruption would adversely affect customer goodwill and employee relations,
which, in turn, would jeopardize the Debtors’ sale efforts.  Accordingly, it is essential that the
Utility Services continue uninterrupted during these chapter 11 cases.
10.
To the best of their knowledge, the Debtors are not in default or arrearages with
respect to their obligations for prepetition Utility Services.  The Debtors pay approximately
$112,200 each month for Utility Services, calculated as a historical average payment for the
12-month period ended March 31, 2024.  The Debtors do not anticipate this monthly average will
change materially during the initial thirty days following the commencement of these chapter 11
and the Debtors reserve all rights with respect to any such determination.  Additionally, although Exhibit C is
intended to be comprehensive, the Debtors may have inadvertently omitted one or more Utility Providers.  By
this Motion, the Debtors request relief applicable to all Utility Providers, regardless of whether such Utility
Provider is specifically identified on Exhibit C.
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cases.  Accordingly, the Debtors estimate that their cost for Utility Services during the next 30
days will be approximately $112,200.
II.
Proposed Adequate Assurance of Payment.
11.
The Debtors intend to satisfy postpetition obligations owed to the Utility Providers
in a timely manner.  Cash held by the Debtors, cash generated in the ordinary course of business,
and the Debtors’ anticipated access to cash collateral and debtor-in-possession financing will
provide sufficient liquidity to pay the Debtors’ Utility Service obligations in accordance with their
prepetition practice.
12.
Each of the foregoing suffices to satisfy the requirements under section 366 of the
Bankruptcy Code, which requires debtors to provide adequate assurance of payment for future
utility services.  Nonetheless, as additional adequate assurance of payment, the Debtors propose
to deposit $56,100 (the “Adequate Assurance Deposit”), into a segregated account (the “Adequate
Assurance Account”) for the benefit of the Utility Providers.  The Adequate Assurance Deposit
represents an amount equal to approximately one-half of the Debtors’ average monthly cost of
Utility Services, as of the Petition Date, calculated as a historical average payment for the
12-month period ended March 31, 2024.
13.
The Adequate Assurance Deposit will be held in a segregated account that is
maintained by the Debtors for the duration of these chapter 11 cases, for the benefit of each Utility
Provider, subject to the Debtors’ right to terminate or discontinue the applicable Utility Services,
and it may be applied to any postpetition defaults in payment to the Utility Providers.  The
Adequate Assurance Deposit will be held by the Debtors, and the Debtors’ creditors will have no
lien on any of the Adequate Assurance Deposit to the extent not returned to the Debtors, pursuant
to the terms set forth in the Orders or the Adequate Assurance Account.
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14.
The Adequate Assurance Deposit, in conjunction with the Debtors’ ability to pay
for future Utility Services in accordance with their prepetition practices (collectively,
the “Proposed Adequate Assurance”), constitutes sufficient adequate assurance to the Utility
Providers in full satisfaction of section 366 of the Bankruptcy Code.
III.
The Adequate Assurance Procedures.
15.
Any Utility Provider that is not satisfied with the Proposed Adequate Assurance
may make a request for adequate assurance of future payment (each, an “Additional Assurance
Request”) pursuant to the adequate assurance procedures set forth in the proposed orders attached
hereto as Exhibit A and Exhibit B (the “Adequate Assurance Procedures”).  The Adequate
Assurance Procedures set forth a streamlined process for Utility Providers to address potential
concerns with respect to the Proposed Adequate Assurance.  Specifically, the Adequate Assurance
Procedures permit a Utility Provider to object to the Proposed Adequate Assurance and request
additional assurance by filing and serving an Additional Assurance Request upon certain notice
parties.
16.
The Debtors may, in their discretion, resolve any Additional Assurance Request by
mutual agreement with the applicable Utility Provider and without further order of the Court.  If
the Debtors determine that the Additional Assurance Request cannot be resolved by mutual
agreement, the Debtors may seek Court resolution of the Additional Assurance Request.
Moreover, unless and until a Utility Provider timely files an objection or serves an Additional
Assurance Request, such Utility Provider shall be (a) deemed to have received adequate assurance
of payment “satisfactory” to such Utility Provider in compliance with section 366 of the
Bankruptcy Code and (b) forbidden from altering, refusing or discontinuing services to, or
discriminating against, the Debtors on account of any unpaid prepetition charges, or require
additional assurance of payment other than the Proposed Adequate Assurance.
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17.
Absent compliance with the Adequate Assurance Procedures, the Debtors request
that the Utility Providers, including those subsequently added to the Utility Providers List, be
forbidden from altering, refusing or discontinuing service or requiring additional assurance of
payment other than the Proposed Adequate Assurance.
IV.
Modifications to the Utility Providers List.
18.
The Debtors have made an extensive and good-faith effort to identify all Utility
Providers and include them on the Utility Providers List.  Nonetheless, to the extent the Debtors
identify new or additional Utility Providers or discontinue services from existing Utility Providers,
the Debtors seek authority to add or remove such parties from the Utility Providers List.
19.
For any Utility Provider that is subsequently added to the Utility Providers List, the
Debtors will serve such Utility Provider with a copy of the Interim Order or Final Order, as
applicable, including the Adequate Assurance Procedures and provide such Utility Provider
14 days’ notice to object to the inclusion of such Utility Provider on the Utility Providers List.
The Debtors request the authority to increase the Adequate Assurance Deposit by an amount equal
to approximately one-half of the Debtors’ monthly average cost of services from the subsequently
added Utility Provider.  The Debtors request that the terms of the Interim Order or Final Order, as
applicable, and the Adequate Assurance Procedures apply to any subsequently identified Utility
Provider to the same extent as if the Utility Provider was listed on the original Utility Providers
List attached hereto.
20.
Upon the discontinuance of any Utility Services, the Debtors request the authority,
in their discretion and without further order of the Court, to reduce the Adequate Assurance
Deposit by an amount not exceeding, for each of the Utility Services being discontinued, the lesser
of (a) one-half of the average monthly cost of such Utility Services, calculated based on the
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aforementioned historical average, to align with the go-forward average monthly cost of Utility
Services and (b) the amount of the Adequate Assurance Deposit then attributable to the applicable
Utility Provider; provided that for any Utility Provider for which the Adequate Assurance Deposit
is reduced, the Debtors shall have (i) provided such Utility Provider with fourteen days’ notice of
such reduction and (ii) paid such Utility Provider in full and for any outstanding postpetition Utility
Services.
21.
To the extent that there is any dispute as to the postpetition amounts owed to a
Utility Provider proposed to be removed from the Utilities Providers List, such Utility Provider
shall not be removed from the Utility Providers List, and no funds shall be removed from the
Adequate Assurance Deposit, until such dispute has been resolved.
Basis for Relief
I.
Sufficient Cause Exists to Approve the Adequate Assurances Procedures.
22.
The Court possesses the power, under section 105(a) of the Bankruptcy Code, to
“issue any order, process, or judgment that is necessary or appropriate to carry out the provisions
of this title.”  The Adequate Assurance Procedures and the Proposed Adequate Assurance are
necessary and appropriate to carry out the provisions of the Bankruptcy Code, particularly
section 366 thereof.  Accordingly, the Court should exercise its powers under sections 366
and 105(a) of the Bankruptcy Code and approve both the Proposed Adequate Assurance and the
Adequate Assurance Procedures.
23.
Section 366 of the Bankruptcy Code protects a debtor against the immediate
termination or alteration of utility services after the petition date.  See 11 U.S.C. § 366.
Section 366(c)(2) requires the debtor to provide “adequate assurance” of payment for postpetition
services in a form “satisfactory” to the utility provider within thirty days of the Petition Date, or
the utility provider may alter, refuse, or discontinue service.  11 U.S.C. § 366(c)(2).
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Section 366(c)(1) of the Bankruptcy Code enumerates what constitutes “assurance of payment.”
11 U.S.C. § 366(c)(1).  Although assurance of payment must be “adequate,” it need not constitute
an absolute guarantee of a debtors’ ability to pay.  See, e.g., In re Great Atl. & Pac. Tea Co.,
2011 WL 5546954, at *5 (Bankr. S.D.N.Y. Nov. 14, 2011) (finding that “[c]ourts will approve an
amount that is adequate enough to insure against unreasonable risk of nonpayment, but are not
required to give the equivalent of a guaranty of payment in full”); In re Caldor, Inc., 199 B.R. 1,
3 (S.D.N.Y. 1996) (“Section 366(b) requires . . . adequate assurance of payment.  The statute does
not require an absolute guarantee of payment.” (internal quotation and citation omitted)), aff’d sub
nom. Va. Elec. & Power Co. v. Caldor, Inc., 117 F.3d 646 (2d Cir. 1997) (same).
24.
When considering whether a given assurance of payment is “adequate,” courts
examine the totality of the circumstances to make an informed decision as to whether the utility
provider will be subject to an unreasonable risk of nonpayment.  See Mass. Elec. Co. v. Keydata
Corp. (In re Keydata Corp.), 12 B.R. 156, 158 (B.A.P. 1st Cir. 1981) (citing In re Cunha,
1 B.R. 330 (Bankr. E.D. Va. 1979)) (stating that the meaning of “adequate assurance of
payment . . . depends upon the facts and circumstances of each case, keeping in mind the intent of
Congress to protect the utility company while preventing discrimination against the debtor”);
In re Adelphia Bus. Sols., Inc., 280 B.R. 63, 82–83 (Bankr. S.D.N.Y. 2002) (finding that “the heart
of the inquiry . . . is the examination of the totality of the circumstances to make an informed
judgment as to whether or not the utilities would be subject to an unreasonable risk of payment”).
25.
Courts have recognized that, in determining the requisite level of adequate
assurance, however, “a bankruptcy court must focus upon the need of the utility for assurance,
and . . . require that the debtor supply no more than that, since the debtor almost perforce has a
conflicting need to conserve scarce financial resources.”  Va. Elec. & Power Co., 117 F.3d at 650
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(internal quotations omitted) (citing In re Penn Jersey Corp., 72 B.R. 981, 985 (Bankr. E.D.
Pa. 1987)); see also In re Penn. Cent. Transp. Co., 467 F.2d 100, 103–04 (3d Cir. 1972) (affirming
the bankruptcy court’s ruling that no utility deposits were necessary where such deposits likely
would “jeopardize the continuing operation of the [debtor] merely to give further security to
suppliers who already are reasonably protected”).  Accordingly, demands by a Utility Provider for
a guarantee of payment should be refused when the Debtors’ specific circumstances already afford
adequate assurance of payment.
26.
Further, courts are permitted to fashion reasonable procedures, such as the
Adequate Assurance Procedures proposed herein, to implement the protections afforded under
section 366 of the Bankruptcy Code.  See, e.g., In re Circuit City Stores, Inc., 2009 WL 484553,
at *5 (Bankr. E.D. Va. Jan. 14, 2009) (stating that “the plain language of § 366 of the Bankruptcy
Code allows the Court to adopt the Procedures set forth in the Utility Order”).  Such procedures
are important because, without them, debtors “could be forced to address numerous requests by
utility companies in an unorganized manner at a critical period in their efforts to reorganize.”  Id.
27.
Here, the Utility Providers are adequately assured against any risk of nonpayment
for future services.  The Adequate Assurance Deposit and the Debtors’ ongoing ability to meet
obligations as they come due in the ordinary course provide assurance of the Debtors’ payment of
their future obligations.  Moreover, any rights the Utility Providers have under sections 366(b) and
(c)(2) of the Bankruptcy Code are wholly preserved under the Adequate Assurance Procedures
because the Utility Providers may choose, in accordance with the Adequate Assurance Procedures,
to request modification of the Proposed Adequate Assurance and be heard on such request, albeit
in an organized and value-maximizing manner.
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28.
The Adequate Assurance Procedures avoid a haphazard and chaotic process
whereby each Utility Provider could make an extortionate, last-minute demand for adequate
assurance that would force the Debtors to pay under the threat of losing critical Utility Services.
See In re Circuit City, 2009 WL 484553, at *5 (noting that “[t]he orderly process contemplated by
[the Debtors’] Procedures is necessary for the Debtors’ smooth transition into chapter 11, and it
will ensure that all parties act in good faith by establishing a fair process that has been reviewed
by the Court”).  Moreover, termination of Utility Services could result in the Debtors’ inability to
operate their business to the detriment of all stakeholders.  Cf. In re Monroe Well Serv., Inc.,
83 B.R. 317, 321–22 (Bankr. E.D. Pa. 1988) (noting that without utility service the debtors “would
have to cease operations” and that section 366 of the Bankruptcy Code “was intended to limit the
leverage held by utility companies, not increase it”).
29.
The Adequate Assurance Procedures are reasonable and consistent with the
purposes of section 366 of the Bankruptcy Code.  Similar procedures have been approved by courts
in this district.  See, e.g., In re Express, Inc., No. 24-10381 (KBO) (Bankr. D. Del. May 15, 2024)
(approving adequate assurance procedures); In re Sientra, Inc., No. 24-10245 (JTD) (Bankr. D.
Del. Mar. 11, 2024) (same); In re MVK FarmCo LLC, No. 23-11721 (LSS) (Bankr. D. Del.
Nov. 13, 2023) (same); In re Yellow Corp., No. 23-11069 (CTG) (Bankr. D. Del. Sept. 13, 2023)
(same); In re PGX Holdings, Inc., No  23-10718 (CTG) (Bankr. D. Del. Jul. 19, 2023) (same).
Processing of Checks and Electronic Fund Transfers Should Be Authorized
30.
The Debtors have sufficient funds to pay the amounts described in this motion in
the ordinary course of business by virtue of access to cash on hand and anticipated access to cash
collateral and debtor-in-possession financing.  In addition, under the Debtors’ existing cash
management system, the Debtors can readily identify checks or wire transfer requests as relating
to any authorized payment in respect of the relief requested herein.  Accordingly, the Debtors do
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not believe that checks or wire transfer requests, other than those relating to authorized payments,
will be inadvertently honored.  Therefore, the Debtors request authority, but not direction, to
authorize all applicable financial institutions, when requested by the Debtors, to receive, process,
honor, and pay any and all checks or wire transfer requests in respect of the relief requested in this
motion.
The Requirements of Bankruptcy Rule 6003(b) Are Satisfied
31.
Bankruptcy Rule 6003 empowers a court to grant certain relief within the first
twenty-one days after the petition date only “to the extent that relief is necessary to avoid
immediate and irreparable harm.”  For the reasons discussed above, the Debtors believe an
immediate and orderly transition into chapter 11 is critical, and the failure to receive the requested
relief during the first twenty-one days of these chapter 11 cases could impact the Debtors’
operations at this important juncture.  The requested relief is necessary for the Debtors to operate
their businesses in the ordinary course, preserve the ongoing value of their operations, and
maximize value of their estates for the benefit of all stakeholders.  The Debtors have demonstrated
that the requested relief is “necessary to avoid immediate and irreparable harm,” as contemplated
by Bankruptcy Rule 6003, and the Court should grant the requested relief.
Reservation of Rights
32.
Nothing contained in this motion or any order granting the relief requested in this
motion, and no action taken by the Debtors pursuant to the relief requested or granted (including
any payment made in accordance with any such order), is intended as or shall be construed or
deemed to be:  (a) an admission as to the amount of, basis for, priority or validity of 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 rights to dispute any claim on any
grounds; (c) a promise or requirement to pay any particular claim; (d) an implication, admission
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or finding that any particular claim is an administrative expense claim, other priority claim or
otherwise of a type specified or defined in this motion or any order granting the relief requested
by this motion; (e) a request or authorization to assume, adopt or reject any agreement, contract,
or lease pursuant to section 365 of the Bankruptcy Code; (f) 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 (g) 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.  If the Court grants the relief sought herein, any payment made
pursuant to the Court’s order is not intended and should not be construed as an admission as to the
validity, priority or amount of any particular claim or a waiver of the Debtors’ rights to
subsequently dispute such claim.
Waiver of Bankruptcy Rule 6004(a) and 6004(h)
33.
To implement the foregoing successfully, the Debtors seek a waiver of the notice
requirements under Bankruptcy Rule 6004(a) and the fourteen-day stay of an order authorizing the
use, sale, or lease of property under Bankruptcy Rule 6004(h).
Notice
34.
The Debtors will provide notice of this motion to:  (a) the United States Trustee for
the District of Delaware; (b) the holders of the 30 largest unsecured claims against the Debtors
(on a consolidated basis); (c) the office of the attorney general for each of the states in which the
Debtors operate; (d) the United States Attorney’s Office for the District of Delaware;
(e) the Internal Revenue Service; (f) the United States Securities and Exchange Commission;
(g) counsel to the 1L Ad Hoc Group; (h) the agent of the DIP Facility and counsel thereto; (i) the
agent of the First Lien Credit Agreement and counsel thereto; (j) the Second Lien Credit
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Agreement Agent and counsel thereto; (k) the agent of the First Lien Notes and counsel thereto;
(l) the Utility Providers; and (m) any party that has requested notice pursuant to Bankruptcy Rule
2002.  As this motion is seeking “first day” relief, the Debtors will serve copies of this motion and
any order entered in respect to this motion as required by Local Rule 9013-1(m).
[Reminder of page intentionally left blank]
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WHEREFORE, the Debtors request entry of Interim Order and Final Order, substantially
in the forms attached hereto as Exhibit A and Exhibit B, (a) granting the relief requested herein
and (b) granting such other relief as the Court deems appropriate under the circumstances.
Dated: June 10, 2024
Wilmington, Delaware
/s/ Patrick J. Reilley
COLE SCHOTZ P.C.
KIRKLAND & ELLIS LLP
Patrick J. Reilley, Esq. (DE Bar No. 4451)
KIRKLAND & ELLIS INTERNATIONAL LLP
500 Delaware Avenue, Suite 1410
Joshua A. Sussberg, P.C. (pro hac vice admission pending)
Wilmington, Delaware 19801
601 Lexington Ave
Telephone:
(302) 652-3131
New York, New York 10022
Facsimile:
(302) 652-3117
Telephone:
(212) 446-4800
Email:
preilley@coleschotz.com
Facsimile:
(212) 446-4900
Email:
joshua.sussberg@kirkland.com
- and -
- and -
Michael D. Sirota, Esq. (pro hac vice admission pending)
Warren A. Usatine, Esq (pro hac vice admission pending)
Spencer A. Winters, P.C. (pro hac vice admission pending)
Court Plaza North, 25 Main Street
Yusuf U. Salloum (pro hac vice admission pending)
Hackensack, New Jersey 07601
333 West Wolf Point Plaza
Telephone:
(201) 489-3000
Chicago, Illinois 60654
Facsimile:
(201) 489-1536
Telephone:
(312) 862-2000
Email:
msirota@coleschotz.com
Facsimile:
(312) 862-2200
wusatine@coleschotz.com
Email:
spencer.winters@kirkland.com
yusuf.salloum@kirkland.com
Proposed Co-Counsel to the Debtors
Proposed Co-Counsel to the Debtors
and Debtors in Possession
and Debtors in Possession
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Exhibit A
Proposed Interim Order
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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 (___)
)
Debtors.
)
(Joint Administration Requested)
)
Re:  Docket No. __
INTERIM ORDER
(I) APPROVING THE DEBTORS’ PROPOSED
ADEQUATE ASSURANCE OF PAYMENT FOR FUTURE
UTILITY SERVICES, (II) APPROVING THE DEBTORS’ PROPOSED
PROCEDURES FOR RESOLVING ADDITIONAL ASSURANCE REQUESTS,
(III) PROHIBITING UTILITY PROVIDERS FROM ALTERING, REFUSING
OR DISCONTINUING SERVICES, AND (IV) 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 interim order (this “Interim Order”), (a) approving
the Debtors’ proposed adequate assurance of payment for future utility services, (b) approving the
Debtors’ proposed procedures for resolving additional adequate assurance requests, (c) prohibiting
utility providers from altering, refusing or discontinuing services, (d) granting related relief, and
(e) scheduling a final hearing to consider approval of the Motion on a final basis; 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
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’
proposed
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 have the meanings ascribed to them in the Motion.
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2
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 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
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 under the circumstances 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 an interim basis as set forth herein.
2.
The final hearing (the “Final Hearing”) on the Motion shall be held on _________,
2024, at__:__ _.m., prevailing Eastern Time.  Any objections or responses to entry of a final order
on the Motion shall be filed on or before 4:00 p.m., prevailing Eastern Time, on _________, 2024
and shall be served on: (a) the Debtors, 26125 North Riverwoods Boulevard, Mettawa, Illinois,
USA 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), (ii) Kirkland
& Ellis LLP, 333 West Wolf Point Plaza, Chicago, Illinois, 60654, Attn.: Spencer A. Winters
(spencer.winters@kirkland.com) and Yusuf U. Salloum (yusuf.salloum@kirkland.com), (iii) Cole
Case 24-11217-BLS    Doc 10    Filed 06/10/24    Page 18 of 37

3
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
Jack M. Dougherty, Esq. (jdougherty@coleschotz.com), and (iv) Cole Schotz P.C., Court Plaza
North, 25 Main Street, Hackensack, New Jersey 07601, Attn.: Michael D. Sirota, Esq.
(msirota@coleschotz.com) and Warren A. Usatine, Esq. (wusatine@coleschotz.com);
(c) counsel to the 1L Ad Hoc Group, (i) 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) and (ii) Pachulski Stang Ziehl & Jones LLP, 919 North Market
Street, 17th Floor, Wilmington, DE 19801, Attn.: Laura Davis Jones (ljones@pszjlaw.com);
(d) the United States Trustee, 844 King Street, Suite 2207, Lockbox 35, Wilmington, Delaware
19801, Attn.: Benjamin A. Hackman (Benjamin.A.Hackman@usdoj.gov); and (e) any statutory
committee appointed in these chapter 11 cases.
3.
Until such time as this Court enters the Final Order on the Motion or the Court
orders otherwise, all Utility Providers are prohibited from altering, refusing or discontinuing
services on account of any unpaid prepetition charges, the commencement of these chapter 11
cases, or any perceived inadequacy of the Proposed Adequate Assurance.
4.
The Debtors shall serve a copy of the Motion and this Interim Order on each Utility
Provider listed on Exhibit C to the Motion within two business days after the date this Interim
Order is entered, and upon service, any such Utility Provider shall be bound by the Adequate
Assurance Procedures.
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4
5.
The Debtors’ service of the Motion upon the Utility Providers List shall not
constitute an admission or concession that any such entity is a “utility” within the meaning of
section 366 of the Bankruptcy Code, and the Debtors reserve all rights and defenses with respect
thereto.
6.
The Debtors are authorized to cause the Adequate Assurance Deposit to be held in
a segregated account during the pendency of these chapter 11 cases.
7.
The Adequate Assurance Deposit and the Debtors’ ability to pay for future Utility
Services in the ordinary course of business subject to the Adequate Assurance Procedures shall
constitute adequate assurance of future payment as required by section 366 of the
Bankruptcy Code.
8.
To the extent the Debtors identify new or additional Utility Providers or discontinue
or terminate services from existing Utility Providers, the Debtors are authorized, but not directed,
to add or remove such parties from the Utility Providers List; provided, however, that the Debtors
shall provide notice of any such addition or removal to the Notice Parties.  For any Utility Provider
that is subsequently removed from the Utility Providers List, the Debtors are authorized, in their
discretion and without further order of the Court, to reduce the Adequate Assurance Deposit by an
amount not exceeding, for each of the Utility Services being discontinued, the lesser of (a) one-half
of the average monthly cost of Utility Services previously provided, calculated based on the
aforementioned historical average to align with the go-forward average monthly cost of Utility
Services and (b) the amount of the Adequate Assurance Deposit then attributable to the applicable
Utility Provider; provided that for any Utility Provider for which the Adequate Assurance Deposit
is reduced, the Debtors shall have (i) provided such Utility Provider with fourteen days’ notice of
such reduction and (ii) paid such Utility Provider in full and for any outstanding postpetition Utility
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5
Services.  To the extent that there is any dispute as to the postpetition amounts owed to a Utility
Provider, such Utility Provider shall not be removed from the Utility Providers List, and no funds
shall be removed from the Adequate Assurance Deposit, until such dispute has been resolved.  For
any Utility Provider that is subsequently added to the Utility Providers List, the Debtors will serve
such Utility Provider with a copy of the Interim Order, including the Adequate Assurance
Procedures, and provide such Utility Provider fourteen days’ notice to object to the inclusion of
such Utility Provider on the Utility Providers List.  The Debtors shall increase the Adequate
Assurance Deposit by an amount equal to approximately one-half of the Debtors’ monthly average
cost of services from any subsequently added Utility Provider.  The terms of the Interim Order and
the Adequate Assurance Procedures shall apply to any subsequently identified Utility Provider to
the same extent as if the Utility Provider was listed on the original Utility Providers List attached
hereto.
9.
The following Adequate Assurance Procedures are hereby approved on an interim
basis:
a.
The Debtors will serve a copy of the Motion and the Interim Order granting
the relief requested herein to each Utility Provider identified on Exhibit C to
the Motion within 2 business days after entry of the Interim Order.
b.
Subject to paragraphs (f)–(l) herein, the Debtors will deposit the Adequate
Assurance Deposit, in the aggregate amount of $56,100 in the Adequate
Assurance Account within twenty days of the Petition Date.
c.
If an amount relating to Utility Services provided postpetition by a Utility
Provider is unpaid, remains unpaid beyond any applicable grace period, and
is undisputed, such Utility Provider may request a disbursement from the
Adequate Assurance Account by giving notice to:  (a) the Debtors, 26125
North Riverwoods Boulevard, Mettawa, Illinois, USA 60045, Attn.:  Charles
Braley (cbraley@alixpartners.com); (b) proposed co-counsel to the Debtors,
Kirkland & Ellis LLP, 601 Lexington Avenue, New York, New York 10022,
Attn.: Joshua A. Sussberg, P.C. (jsussberg@kirkland.com), Chris Ceresa
(chris.ceresa@kirkland.com),
and
Tiffani
Chanroo
(tiffani.chanroo@kirkland.com); Kirkland & Ellis LLP, 333 Wolf Point
Plaza,
Chicago,
Illinois,
60654,
Attn.:
Spencer
A.
Winters
Case 24-11217-BLS    Doc 10    Filed 06/10/24    Page 21 of 37

6
(spencer.winters@kirkland.com)
and
Yusuf
U.
Salloum
(yusuf.salloum@kirkland.com); and 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); Cole Schotz P.C., Court Plaza North, 25
Main Street, Hackensack, New Jersey 07601, Attn.: Michael D. Sirota, Esq.
(msirota@coleschotz.com),
Warren
A.
Usatine,
Esq.
(wusatine@coleschotz.com), (c) counsel to the 1L Ad Hoc Group,
(i) 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)
and (ii) Pachulski Stang Ziehl & Jones LLP, 919 North Market Street, 17th
Floor,
Wilmington,
DE
19801,
Attn.:
Laura
Davis
Jones
(ljones@pszjlaw.com); (d) the United States Trustee, 844 King Street, Suite
2207, Lockbox 35, Wilmington, Delaware 19801, Attn.: Benjamin A.
Hackman (Benjamin.A.Hackman@usdoj.gov), (e) counsel to any statutory
committee appointed in these chapter 11 cases, and (f) to the extent not listed
herein, those parties requesting notice pursuant to Bankruptcy Rule 2002
(collectively, the “Notice Parties”).  The Debtors shall honor such request
within 5 business days after the date the request is received by the Debtors.
The Debtors and any such requesting Utility Provider maintain the ability to
resolve any dispute regarding such request without further order of the Court.
To the extent a Utility Provider receives a disbursement from the Adequate
Assurance Account, the Debtors shall replenish the Adequate Assurance
Account in the amount disbursed.
d.
The portion of the Adequate Assurance Deposit attributable to each Utility
Provider (including any additional amount deposited upon request of any
applicable Utility Provider), or any portion thereof, shall revert to the
Debtors less any amounts owed on account of unpaid, postpetition Utility
Services, by no later than 5 business days following the earlier of the date
upon which (i) the Debtors reconcile and pay the Utility Provider’s final
invoice in accordance with applicable nonbankruptcy law following the
Debtors’ termination of Utility Services from such Utility Provider or (ii) the
effective date of any chapter 11 plan confirmed in these chapter 11 cases.
e.
Any Utility Provider desiring additional assurances of payment in the form
of deposits, prepayments, or otherwise must serve a request for additional
assurance (an “Additional Assurance Request”) on the Notice Parties.
f.
Any Additional Assurance Request must:  (i) be in writing; (ii) identify the
location for which the Utility Services are provided; (iii) summarize the
Debtors’ payment history relevant to the affected account(s); (iv) certify the
amount that is equal to one-half the monthly cost of the Utility Services the
Utility Provider supplies to the Debtors, calculated as a historical average
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7
over the twelve-month period ended March 31, 2024; (v) provide evidence
that the Debtors have a direct obligation to the Utility Provider; and
(vi) explain why the Utility Provider believes the Proposed Adequate
Assurance is not sufficient adequate assurance of future payment.
g.
If a Utility Provider fails to file and serve an Additional Assurance Request,
the Utility Provider shall be (i) deemed to have received “satisfactory”
adequate assurance of payment in compliance with section 366 of the
Bankruptcy Code and (ii) forbidden from altering, refusing or discontinuing
Utility Services to, or discriminating against, the Debtors on account of any
unpaid prepetition charges, or requiring additional assurance of payment
other than the Proposed Adequate Assurance.
h.
Upon the Debtors’ receipt of an Additional Assurance Request, the Debtors
shall have twenty days from the receipt of the Additional Assurance Request
to negotiate with the Utility Provider to resolve such Utility Provider’s
Additional Assurance Request.
i.
Without further order of the Court, the Debtors may, after consultation with
the 1L Ad Hoc Group, resolve any Additional Assurance Request by mutual
agreement with a Utility Provider, and the Debtors may, in connection with
any such agreement, provide a Utility Provider with additional adequate
assurance of payment, including, but not limited to, cash deposits,
prepayments, or other forms of security if the Debtors believe that such
adequate assurance is reasonable.
j.
If the Debtors determine in their business judgment that the Additional
Assurance Request is not reasonable and the Debtors are unable to reach an
alternative resolution with the Utility Provider within twenty days of receipt
of the Additional Assurance Request, the Debtors may request a hearing
(the “Determination Hearing”) before the Court to determine the adequacy
of assurance of payment with respect to that Utility Provider pursuant to
section 366(c)(3) of the Bankruptcy Code.
k.
Pending resolution of such dispute at a Determination Hearing, the relevant
Utility Provider shall be prohibited from altering, refusing, or discontinuing
Utility Services to the Debtors on account of:  (i) unpaid charges for
prepetition services; (ii) a pending Additional Assurance Request; or
(iii) any objections filed in response to the Proposed Adequate Assurance.
10.
The Utility Providers are prohibited from requiring additional adequate assurance
of payment other than pursuant to the Adequate Assurance Procedures.
11.
The banks and financial institutions on which checks were drawn or electronic
payment requests made in payment of the prepetition obligations approved herein are authorized
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8
to receive, process, honor, and pay all such checks and electronic payment requests when presented
for payment, and all such banks and financial institutions are authorized to rely on the Debtors’
designation of any particular check or electronic payment request as approved by this Interim
Order.
12.
Nothing contained in the Motion or this Interim Order, and no action taken pursuant
to the relief requested or granted (including any payment made in accordance with this Interim
Order), 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 Interim
Order; (e) a request or authorization to assume, adopt or reject any agreement, contract or lease
pursuant to section 365 of the Bankruptcy Code; (f) 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 (g) 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.
13.
The Debtors are authorized, but not directed, to issue postpetition checks or to effect
postpetition fund transfer requests, in replacement of any checks or fund transfer requests that are
dishonored as a consequence of these chapter 11 cases with respect to prepetition amounts owed
in connection with the relief granted herein.
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9
14.
Nothing in the Motion or this Interim Order waives or modifies the requirements
of the Restructuring Support Agreement, including, without limitation, the consent and
consultation rights contained therein.
15.
Notwithstanding anything to the contrary contained herein, any payment to be made
hereunder, and 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 the DIP Order and any
action taken or proposed to be taken hereunder, the terms of the DIP Order shall control.
16.
The Debtors have demonstrated that the requested relief is “necessary to avoid
immediate and irreparable harm,” as contemplated by Bankruptcy Rule 6003.
17.
Nothing in this Interim Order authorizes the Debtors to accelerate any payments
not otherwise due prior to the date of the Final Hearing.
18.
The contents of the Motion satisfy the requirements of Bankruptcy Rule 6003(b).
19.
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.
20.
Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of this Interim
Order are immediately effective and enforceable upon its entry.
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10
21.
The Debtors are authorized to take all actions necessary to effectuate the relief
granted in this Interim Order in accordance with the Motion.
22.
This Court retains jurisdiction with respect to all matters arising from or related to
the implementation, interpretation, and enforcement of this Interim Order.
Case 24-11217-BLS    Doc 10    Filed 06/10/24    Page 26 of 37

Exhibit B
Proposed Final Order
Case 24-11217-BLS    Doc 10    Filed 06/10/24    Page 27 of 37

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 (___)
)
Debtors.
)
(Joint Administration Requested)
)
Re:  Docket No. __
FINAL ORDER (I) APPROVING
THE DEBTORS’ PROPOSED ADEQUATE ASSURANCE OF PAYMENT FOR
FUTURE UTILITY SERVICES, (II) APPROVING THE DEBTORS’ PROPOSED
PROCEDURES FOR RESOLVING ADDITIONAL ASSURANCE REQUESTS,
(III) PROHIBITING UTILITY PROVIDERS FROM ALTERING, REFUSING
OR DISCONTINUING SERVICES, AND (IV) 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 “Final Order”), (a) approving the
Debtors’ proposed adequate assurance of payment for future utility services, (b) approving the
Debtors’ proposed procedures for resolving additional adequate assurance requests, (c) prohibiting
utility providers from altering, refusing or discontinuing services, and (d) 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);
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’
proposed
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 have the meanings ascribed to them in the Motion.
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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 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 this Court having determined that the
legal and factual bases set forth in the Motion 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.
All Utility Providers are prohibited from altering, refusing, or discontinuing
services on account of any unpaid prepetition charges, the commencement of these chapter 11
cases, or any perceived inadequacy of the Proposed Adequate Assurance.
3.
The Debtors shall serve a copy of the Motion and this Final Order on each Utility
Provider listed on Exhibit C to the Motion within 2 business days after the date this Final Order is
entered, and upon service, any such Utility Provider shall be bound by the Adequate Assurance
Procedures.
4.
The Debtors’ service of the Motion upon the Utility Providers List shall not
constitute an admission or concession that any such entity is a “utility” within the meaning of
section 366 of the Bankruptcy Code, and the Debtors reserve all rights and defenses with respect
thereto.
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3
5.
The Debtors are authorized to cause the Adequate Assurance Deposit to be held in
a segregated account during the pendency of these chapter 11 cases.
6.
The Adequate Assurance Deposit and the Debtors’ ability to pay for future Utility
Services in the ordinary course of business subject to the Adequate Assurance Procedures shall
constitute adequate assurance of future payment as required by section 366 of the Bankruptcy
Code.
7.
To the extent the Debtors identify new or additional Utility Providers or discontinue
or terminate services from existing Utility Providers, the Debtors are authorized, but not directed,
to add or remove such parties from the Utility Providers List; provided, however, that the Debtors
shall provide notice of any such addition or removal to the Notice Parties.  For any Utility Provider
that is subsequently removed from the Utility Providers List, the Debtors are authorized, in their
discretion and without further order of the Court, to reduce the Adequate Assurance Deposit by an
amount not exceeding, for each of the Utility Services being discontinued, the lesser of (a) one-half
of the average monthly cost of Utility Services previously provided, calculated based on the
aforementioned historical average to align with the go-forward average monthly cost of Utility
Services and (b) the amount of the Adequate Assurance Deposit then attributable to the applicable
Utility Provider; provided that for any Utility Provider for which the Adequate Assurance Deposit
is reduced, the Debtors shall have (i) provided such Utility Provider with fourteen days’ notice of
such reduction and (ii) paid such Utility Provider in full and for any outstanding postpetition Utility
Services.  To the extent that there is any dispute as to the postpetition amounts owed to a Utility
Provider, such Utility Provider shall not be removed from the Utility Providers List, and no funds
shall be removed from the Adequate Assurance Deposit, until such dispute has been resolved.  For
any Utility Provider that is subsequently added to the Utility Providers List, the Debtors will serve
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4
such Utility Provider with a copy of the Final Order, including the Adequate Assurance
Procedures, and provide such Utility Provider 14 days’ notice to object to the inclusion of such
Utility Provider on the Utility Providers List.  The Debtors shall increase the Adequate Assurance
Deposit by an amount equal to approximately one-half of the Debtors’ monthly average cost of
services from any subsequently added Utility Provider.  The terms of the Final Order and the
Adequate Assurance Procedures shall apply to any subsequently identified Utility Provider to the
same extent as if the Utility Provider was listed on the original Utility Providers List attached
hereto.
8.
The following Adequate Assurance Procedures are hereby approved:
a.
The Debtors will serve a copy of the Motion and the Final Order granting the
relief requested herein to each Utility Provider identified on Exhibit C to the
Motion within 3 business days after entry of the Final Order by the Court.
b.
Subject to paragraphs (f)–(l) herein, to the extent they have not already done
so, the Debtors will deposit the Adequate Assurance Deposit, in the
aggregate amount of $56,100, in the Adequate Assurance Account within
twenty days of the Petition Date.
c.
If an amount relating to Utility Services provided postpetition by a Utility
Provider is unpaid, remains unpaid beyond any applicable grace period, and
is undisputed, such Utility Provider may request a disbursement from the
Adequate Assurance Account by giving notice to:  (a) the Debtors, 26125
North Riverwoods Boulevard, Mettawa, Illinois, USA 60045, Attn.:  Charles
Braley (cbraley@alixpartners.com); (b) proposed co-counsel to the Debtors,
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); Kirkland & Ellis LLP, 333 Wolf Point
Plaza, Chicago, Illinois, 60654, Attn.: Spencer A. Winters, and Yusuf U.
Salloum
(yusuf.salloum@kirkland.com);
and
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); Cole Schotz P.C., Court Plaza North, 25
Main Street, Hackensack, New Jersey 07601, Attn.: Michael D. Sirota, Esq.
(msirota@coleschotz.com),
Warren
A.
Usatine,
Esq.
(wusatine@coleschotz.com), (c) counsel to the 1L Ad Hoc Group,
(i) Gibson, Dunn & Crutcher LLP,  200 Park Avenue, New York, NY 10166-
Case 24-11217-BLS    Doc 10    Filed 06/10/24    Page 31 of 37

5
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)
and (ii) Pachulski Stang Ziehl & Jones LLP, 919 North Market Street, 17th
Floor,
Wilmington,
DE
19801,
Attn.:
Laura
Davis
Jones
(ljones@pszjlaw.com); (d) the United States Trustee, 844 King Street, Suite
2207, Lockbox 35, Wilmington, Delaware 19801, Attn.: Benjamin A.
Hackman (Benjamin.A.Hackman@usdoj.gov), (e) counsel to any statutory
committee appointed in these chapter 11 cases, and (f) to the extent not listed
herein, those parties requesting notice pursuant to Bankruptcy Rule 2002
(collectively, the “Notice Parties”).  The Debtors shall honor such request
within 5 business days after the date the request is received by the Debtors.
The Debtors and any such requesting Utility Provider maintain the ability to
resolve any dispute regarding such request without further order of the Court.
To the extent a Utility Provider receives a disbursement from the Adequate
Assurance Account, the Debtors shall replenish the Adequate Assurance
Account in the amount disbursed.
d.
The portion of the Adequate Assurance Deposit attributable to each Utility
Provider (including any additional amount deposited upon request of any
applicable Utility Provider), or any portion thereof, shall revert to the
Debtors less any amounts owed on account of unpaid, postpetition Utility
Services, by no later than 5 business days following the earlier of the date
upon which (i) the Debtors reconcile and pay the Utility Provider’s final
invoice in accordance with applicable nonbankruptcy law following the
Debtors’ termination of Utility Services from such Utility Provider or (ii) the
effective date of any chapter 11 plan confirmed in these chapter 11 cases.
e.
Any Utility Provider desiring additional assurances of payment in the form
of deposits, prepayments or otherwise must serve a request for additional
assurance (an “Additional Assurance Request”) on the Notice Parties.
f.
Any Additional Assurance Request must:  (i) be in writing; (ii) identify the
location for which the Utility Services are provided; (iii) summarize the
Debtors’ payment history relevant to the affected account(s); (iv) certify the
amount that is equal to one-half the monthly cost of the Utility Services the
Utility Provider supplies to the Debtors, calculated as a historical average
over the twelve-month period ended March 31, 2024; (v) provide evidence
that the Debtors have a direct obligation to the Utility Provider; and
(vi) explain why the Utility Provider believes the Proposed Adequate
Assurance is not sufficient adequate assurance of future payment.
g.
If a Utility Provider fails to file and serve an Additional Assurance Request,
the Utility Provider shall be (i) deemed to have received “satisfactory”
adequate assurance of payment in compliance with section 366 of the
Bankruptcy Code and (ii) forbidden from altering, refusing, or discontinuing
Utility Services to, or discriminating against, the Debtors on account of any
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6
unpaid prepetition charges, or requiring additional assurance of payment
other than the Proposed Adequate Assurance.
h.
Upon the Debtors’ receipt of an Additional Assurance Request, the Debtors
shall have twenty days from the receipt of the Additional Assurance Request
to negotiate with the Utility Provider to resolve such Utility Provider’s
Additional Assurance Request.
i.
Without further order of the Court, the Debtors may, after consultation with
the 1L Ad Hoc Group, resolve any Additional Assurance Request by mutual
agreement with a Utility Provider, and the Debtors may, in connection with
any such agreement, provide a Utility Provider with additional adequate
assurance of payment, including, but not limited to, cash deposits,
prepayments, or other forms of security if the Debtors believe that such
adequate assurance is reasonable.
j.
If the Debtors determine in their business judgment that the Additional
Assurance Request is not reasonable and the Debtors are unable to reach an
alternative resolution with the Utility Provider within twenty days of receipt
of the Additional Assurance Request, the Debtors may request a hearing
(the “Determination Hearing”) before the Court to determine the adequacy
of assurance of payment with respect to that Utility Provider pursuant to
section 366(c)(3) of the Bankruptcy Code.
k.
Pending resolution of such dispute at a Determination Hearing, the relevant
Utility Provider shall be prohibited from altering, refusing or discontinuing
Utility Services to the Debtors on account of: (i) unpaid charges for
prepetition services; (ii) a pending Additional Assurance Request; or
(iii) any objections filed in response to the Proposed Adequate Assurance.
9.
The Utility Providers are prohibited from requiring additional adequate assurance
of payment other than pursuant to the Adequate Assurance Procedures.
10.
The banks and financial institutions on which checks were drawn or electronic
payment requests made in payment of the prepetition obligations approved herein are authorized
to receive, process, honor, and pay all such checks and electronic payment requests when presented
for payment, and all such banks and financial institutions are authorized to rely on the Debtors’
designation of any particular check or electronic payment request as approved by this Final Order.
11.
Nothing contained in the Motion or this Final Order, and no action taken pursuant
to the relief requested or granted (including any payment made in accordance with this Final
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7
Order), 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 Final
Order; (e) a request or authorization to assume, adopt or reject any agreement, contract or lease
pursuant to section 365 of the Bankruptcy Code; (f) 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 (g) 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.
12.
The Debtors are authorized, but not directed, to issue postpetition checks, or to
effect postpetition fund transfer requests, in replacement of any checks or fund transfer requests
that are dishonored as a consequence of these chapter 11 cases with respect to prepetition amounts
owed in connection with the relief granted herein.
13.
Nothing in the Motion or this Final Order waives or modifies the requirements of
the Restructuring Support Agreement, including, without limitation, the consent and consultation
rights contained therein.
14.
Notwithstanding anything to the contrary contained herein, any payment to be made
hereunder, and 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
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8
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 the DIP Order and any
action taken or proposed to be taken hereunder, the terms of the DIP Order shall control.
15.
The Debtors have demonstrated that the requested relief is “necessary to avoid
immediate and irreparable harm,” as contemplated by Bankruptcy Rule 6003.
16.
The contents of the Motion satisfy the requirements of Bankruptcy Rule 6003(b).
17.
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.
18.
Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of this Final
Order are immediately effective and enforceable upon its entry.
19.
The Debtors are authorized to take all actions necessary to effectuate the relief
granted in this Final Order in accordance with the Motion.
20.
This Court retains jurisdiction with respect to all matters arising from or related to
the implementation, interpretation, and enforcement of this Final Order.
Case 24-11217-BLS    Doc 10    Filed 06/10/24    Page 35 of 37

Exhibit C
Utility Providers List
Case 24-11217-BLS    Doc 10    Filed 06/10/24    Page 36 of 37

Utility Company
Address
Service(s) Provided
Account Number(s)
Proposed Adequate
Assurance
Southern California
Edison Company
PO Box 300, Rosemead,
CA 91770
Electricity
700438682544
700352656173
700127549889

$52,200.00
Commonwealth Edison
Company - ComEd
2 Lincoln Ave., 9th
Floor, Oakbrook Terrace,
IL 60181
Electricity
7231447000
2913292222

$600.00
Palm Springs Disposal
Service, Inc.
4690 E Mesquite Ave.,
Palm Springs, CA 92264
Waste Disposal
1-0033272-3

$500.00
Culligan Water
9399 W Higgins Rd.,
Suite 1100, Rosemont, IL
60018
Water
488205

$330.00
Southern California Gas
Company dba The Gas
Company; SoCalGas
PO Box 300, Rosemead,
CA 91770
Gas
02973085927
15784192906
10992585389

$140.00
Desert Water Agency
1200 S Gene Autry Trl.,
Palm Springs, CA 92264
Water
45071628

$30.00
T-Mobile
12920 SE 38th St.,
Bellevue, WA 98006
Telecommunications
982715510

$2,300.00
Case 24-11217-BLS    Doc 10    Filed 06/10/24    Page 37 of 37

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