UNITED STATES BANKRUPTCY COURT
- Date
- 2024-06-10
Summary
An objection filed August 1, 2024 as Doc 346 by Quad DBC Holdings, LLC in the jointly administered Chapter 11 cases of Vyaire Medical, Inc., et al., Case No. 24-11217(BLS), in the U.S. Bankruptcy Court for the District of Delaware. The landlord objects to the Debtors' First Notice to Contract Parties of Potentially Assumed and Assigned Executory Contracts and Unexpired Leases, which lists proposed cure amounts of $0.00 for its lease of two buildings in Irvine, California. The objection states that the tenant owed no less than $713,051.00 in unpaid rent on the Petition Date, plus $45,000 in legal fees and costs, and cites 11 U.S.C. § 365(b)(1). It asks the court to approve assumption and assignment of the lease only upon payment of the full cure. The three-page filing is signed by Damien Nicholas Tancredi of Flaster/Greenberg, P.C.
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Case 24-11217-BLS Doc 346 Filed 08/01/24 Page 1 of 3
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re: Chapter 11
VYAIRE MEDICAL, INC., et al.
Case No. 24-11217(BLS)
Debtors (Jointly Administered)
OBJECTION OF QUAD DBC HOLDINGS, LLC TO FIRST NOTICE TO CONTRACT
PARTIES OF POTENTIALLY ASSUMED AND ASSIGNED EXECUTORY
CONTRACTS AND UNEXPIRED LEASES
Quad DBC Holdings, LLC (“Landlord”), by and through its undersigned counsel, hereby
objects to the Debtors’ First Notice to Contract Parties of Potentially Assumed and Assigned
Executory Contracts and Unexpired Leases [D.I. 256] (the “Cure Notice”), and respectfully
states as follows:
Background
1. Landlord and debtor, Vyaire Medical Inc., (“Tenant”) are parties to an unexpired
lease of two buildings of non-residential real property located at 510 Technology Drive and 520
Technology Drive in Irvine, California, (the “Lease”). On the Petition Date herein, Tenant was in
default under the Lease.
2. On June 10, 2024, the Debtors filed the Motion of Debtors for Entry of an Order
(1) 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 Procedures for the Assumption and
Assignment of Contracts, (VI) Approving the Sale of the Debtors’ Assets Free and Clear, and
(VII) Granting Related Relief [Docket No. 16] (“Sale Motion”). Through the Sale Motion,
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Debtors seek this Court’s Approval of the sale of substantially all of their assets to one or more
to-be-determined purchasers.
3. On July 11, 2024, this 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 Procedures for the Assumption and Assignment of Contracts, (VI) Approving the Sale
of the Debtors’ Assets Free and Clear, and (VII) Granting Related Relief [Docket No. 249]
(“Sale Procedures Order”).
4. On July 11, 2024, pursuant to the Sale Procedures Order, the Debtors filed the
Cure Notice. The Cure Notice includes several entries corresponding to the Landlord (“Landlord
Listings”). All Landlord Listings propose cure amounts of $0.00 (the “Proposed Cure Amount”).
Objection
5. Landlord objects to the Proposed Cure Amount and the Cure Notice because,
inter alia, the Proposed Cure Amount and the Cure Notice does not propose to satisfy Debtors’
cure obligations consistent with section 365(b)(1) of the Bankruptcy Code.
6. To assume a lease in default under section 365 (b)(1) of the Bankruptcy Code, the
debtor, inter alia, must or propose to cure all non-monetary defaults and to compensate the lessor
for all actual pecuniary losses. Accordingly, to the extent that the Debtors here seek to assume
and assign the Lease, the Debtors must pay the full cure amounts based upon the actual amounts
that are due on Petition Date and that accrue thereafter which are not paid as of the date for
assumption and assignment by the Debtors (“Effective Date”). See 11 U.S.C. § 365(b)(1).
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7. Landlord expressly objects to the Proposed Cure Amount of $0. On the Petition
Date, Tenant owed Landlord no less than $713,051.00 for unpaid rent. Additionally, Tenant
owes Landlord $45,000 for Landlord’s legal fees and costs incurred to the date of this Objection,
which will continue to accrue up to the Effective Date. Tenant and/or other Debtors continue to
utilize and/or keep third parties from utilizing the rented building. As such, the Cure amount may
exceed the foregoing pecuniary losses calculable through the Effective Date.
8. Any order permitting the assumption and assignment of any of the Lease must
direct that the Debtors or their assignees fully pay all amounts due to Landlord under the Lease
as of the Effective Date, as a condition precedent to any assumption and assignment.
WHEREFORE, Landlord respectfully requests that this Court enter an order that: (i)
approves assumption and assignment of the Lease only upon payment of the full cure, in an
amount not less than $713,051.00; and (ii) grants Landlord such additional relief as this Court
deems just and equitable.
Date: August 1, 2024 FLASTER/GREENBERG, P.C.
/s/ Damien Nicholas Tancredi
By: _______________________________
Damien Nicholas Tancredi (DE 5395)
221 W. 10th Street, 4th Floor
Wilmington, DE 19801
(215) 587-5675
damien.tancredi@flastergreenberg.com
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