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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 (BLS)
)
Debtors.
)
(Joint Administration Requested)
)
MOTION OF DEBTORS FOR ENTRY OF AN
ORDER AUTHORIZING THE DEBTORS TO FILE UNDER
SEAL THE FEE LETTERS RELATED TO THE DIP FACILITY
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 an order, substantially in the form attached hereto as
Exhibit A (the “Order”), (a) authorizing the Debtors to file the Fee Letters (as defined herein), of
which the Debtors are seeking approval pursuant to the Motion of Debtors for Entry of Interim and
Final Orders (I) Authorizing the Debtors to (A) Obtain Postpetition Financing and (B) Utilize
Cash Collateral, (II) Granting Liens and Superpriority Administrative Expense Claims,
(III) Granting Adequate Protection to Prepetition Secured Parties, (IV) Modifying the Automatic
Stay, (V) Scheduling a Final Hearing, and (VI) Granting Related Relief, filed contemporaneously
1 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 on June 10, 2024 (the “Petition Date”) 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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herewith (the “DIP Motion”) filed contemporaneously herewith; (b) directing that the redacted
portions of the Fee Letters shall remain under seal and not be made available to anyone, without
the prior written consent of both the Debtors and the DIP Agent, except to (i) the United States
Bankruptcy Court for the District of Delaware (the “Court”), (ii) the United States Trustee for the
District of Delaware (the “U.S. Trustee”), (iii) counsel to any official committee appointed in these
cases (the “Committee”); and (iv) any other party as may be ordered by the Court or agreed to by
the Debtors and the DIP Agent, in each case under appropriate confidentiality agreements
reasonably satisfactory to the Debtors and the DIP Agent that preserve the confidentiality of the
Fee Letters (and any information derived therefrom); and (c) granting related relief.
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 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 section 107(b) of title 11 of
the United States Code, 11 U.S.C. §§ 101–1532 (the “Bankruptcy Code”), Rule 9018 of the
Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), and Local Rule 9018-1.
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Background
5.
Contemporaneously with the filing of this Motion, the Debtors filed the DIP
Motion, which seeks entry of an order authorizing the Debtors to, among other things, obtain
postpetition secured financing and undertake payment of related fees with respect to the $180
million senior secured, superpriority, priming debtor-in-possession credit facility (the “DIP
Facility”), by and among the DIP Borrowers, the DIP Guarantors, the several banks and other
financial institutions or entities from time to time party thereto, as lenders (collectively, the “DIP
Lenders”), and Wilmington Savings Fund Society, FSB, as administrative and collateral agent (in
such capacities, and together with its successors and permitted assigns, the “DIP Agent” and,
together with the DIP Lenders, the “DIP Secured Parties”).
6.
By this motion, the Debtors seek authorization to file under seal the form of
execution version of certain fee letters by and between the DIP Borrowers and the DIP Agent,
which sets forth certain fees in connection with the DIP Facility (the “Fee Letters”). The Fee
Letters contain sensitive and confidential commercial information regarding the structure and
amount of the fees relating to the DIP Facility (the “Confidential Information”). Because the
disclosure of this Confidential Information could harm the Debtors and the DIP Secured Parties if
made publicly available, the Debtors seek authority to file the Fee Letters under seal, subject to
the limited approved disclosures as provided herein.
Basis for Relief
7.
Pursuant to section 107(b) of the Bankruptcy Code, a bankruptcy court must protect
entities from potential harm that may result from the disclosure of certain confidential information.
See 11 U.S.C. § 107(b). Specifically, section 107(b) provides, in relevant part, as follows:
On request of a party in interest, the bankruptcy court shall, and on
the bankruptcy court’s own motion, the bankruptcy court may—
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(1)
protect an entity with respect to a trade secret or confidential
research, development, or commercial information;
Id. Section 105(a) of the Bankruptcy Code, in turn, codifies the inherent equitable powers of
bankruptcy courts and empowers them to “issue any order, process, or judgment that is necessary
or appropriate to carry out the provisions of this title.” 11 U.S.C. § 105(a).
8.
Further, Bankruptcy Rule 9018 sets forth the procedures by which a party may
obtain a protective order authorizing the filing of a document under seal. See Fed. R.
Bankr. P. 9018. Bankruptcy Rule 9018 provides, in relevant part, that “[o]n motion or on its own
initiative, with or without notice, the court may make any order which justice requires (1) to protect
the estate or any entity in respect of a trade secret or other confidential research, development, or
commercial information[.]” Id. Further, Local Rule 9018-1(d) provides, in relevant part, that “any
entity seeking to file a document . . . under seal must file a motion to requesting such relief[.]”
Del. Bankr. L.R. 9018-1(d)(i).
9.
If the material sought to be protected satisfies one of the categories identified in
section 107(b) of the Bankruptcy Code, “the court is required to protect a requesting party and has
no discretion to deny the application.” Video Software Dealers Ass’n v. Orion Pictures Corp.
(In re Orion Pictures Corp.), 21 F.3d 24, 27 (2d Cir. 1994) (emphasis in original); accord
In re Alterra Healthcare Corp., 353 B.R. 66, 75–76 (Bankr. D. Del. 2006) (citing Orion Pictures);
In re Altegrity, Inc., 2015 WL 10963572, at *3 (Bankr. D. Del. July 6, 2015) (“[I]f it is established
that the documents sought to be sealed fall within the enumerated statutory exception, the Court
must grant the requested relief (or such other relief that protects the moving party).”). Stated
differently, section 107(b) of the Bankruptcy Code does not require a party seeking its protections
to demonstrate “good cause.” Orion Pictures, 21 F.3d at 28. “Courts have supervisory powers
over their records and files and may deny access to those records and files to prevent them from
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being used for an improper purpose.” In re Kaiser Aluminum Corp., 327 B.R. 554, 560 (D. Del.
2005); see also In re A C & S Inc., 775 Fed. Appx. 78, 79 (3d Cir. 2019) (mem.) (finding that
“every court has supervisory power over its own records and files, and access has been denied
where court files might have become a vehicle for improper purposes”). Courts are required to
provide such protections “generally where open inspection may be used as a vehicle for improper
purposes.” Orion Pictures, 21 F.3d at 27; accord In re Motions Seeking Access to 2019
Statements, 585 B.R. 733, 753 (Bankr. D. Del. 2018) (citing Orion Pictures). Indeed, the
“authority goes not just to the protection of confidential documents, but to other confidentiality
restrictions that are warranted in the interests of justice.” In re Global Crossing Ltd, 295 B.R. 720,
724 (Bankr. S.D.N.Y. 2003).
10.
“Commercial information”—“information which would result in an unfair
advantage to competitors by providing them information as to the commercial operations of the
debtor”—is one category of information within the scope of section 107(b) of the Bankruptcy
Code. Alterra Healthcare, 353 B.R at 75 (quoting Orion Pictures); Altegrity, 2015 WL 10963572,
at *3; see also Global Crossing, 295 B.R. at 725 (holding that the purpose of Bankruptcy Rule
9018 is to “protect business entities from disclosure of information that could reasonably be
expected to cause the entity commercial injury”). Commercial information need not rise to the
level of a trade secret to be protected under section 107(b) of the Bankruptcy Code.
See Orion Pictures, 21 F.3d at 27–28 (holding that section 107(b)(1) creates an exception to the
general rule that court records are open to examination by the public and, under this exception, an
interested party has to show only that the information it wishes to seal is “confidential” and
“commercial” in nature); accord Altegrity, 2015 WL 10963572, at *3 (citing Orion Pictures).
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11.
The disclosure of the terms of the Fee Letters would cause confidential commercial
information to be revealed, thereby exposing the Debtors and the DIP Secured Parties to substantial
harm, create an unfair advantage for competitors, and violate the Debtors’ agreement with the DIP
Agent to keep the terms of the Fee Letters confidential. Indeed, the Fee Letters reflect detailed
proprietary commercial information describing fees to be paid in connection with the DIP Facility,
which information is customarily considered by the DIP Secured Parties in particular, as well as
in the financial services industry in general, to be highly sensitive and confidential commercial
information not typically disclosed to the public or competing financial institutions. Such a broad
publication of confidential commercial information contained in the Fee Letters would be
inappropriate and materially harmful to the businesses of the DIP Secured Parties.
12.
The DIP Motion discloses the aggregate amount of fees to be paid to the DIP Agent
and DIP Lenders, but given the highly competitive nature of the investment banking and lending
industries, it is of the utmost importance that the details of the fee structures set forth in the Fee
Letters be kept confidential so that competitors cannot use the commercial information contained
therein to gain a strategic advantage in the marketplace. The Debtors submit that parties in interest
will not be materially prejudiced by the relief sought herein because the unredacted Fee Letters
will be reviewed by the Court, the U.S. Trustee, counsel to the Committee, and any party ordered
by the Court. Further, any party-in-interest can request that the Debtors and the DIP Agent permit
them to review the Fee Letters.
13.
Courts in this jurisdiction have previously determined that certain documents
entered into in connection with postpetition financing, such as fee or expense letters, qualify as
“confidential commercial information” within the meaning of section 107(b) of the Bankruptcy
Code and have authorized the filing of such documents under seal. See, e.g., In re Lannett
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Company, Inc., No. 23-10559 (JKS) (Bankr. D. Del. June 9, 2023) (granting debtors’ motion to
file a fee letter under seal); In re Extraction Oil & Gas Inc., No. 20-11548 (CSS) (Bankr. D. Del.
June 14, 2020) (same); In re Forever 21, Inc., No. 19-12122 (KG) (Bankr. D. Del. Oct. 2, 2019)
(same); In re CTI Foods, LLC, No. 19-10497 (CSS) (Bankr. D. Del. Mar. 12, 2019) (same).
14.
The Debtors therefore submit that good cause exists to authorize the Debtors to file
the Fee Letters under seal because of the harm that would ensue if the sensitive and confidential
commercial information contained in the Fee Letters became public information.
Compliance with Local Rule 9018-1(d)
15.
Pursuant to Local Rule 9018- 1(d)(iii), the undersigned proposed counsel have
conferred with the DIP Lenders in good faith and reached an agreement concerning what
information contained in the Fee Letters must remain sealed.
Notice
16.
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) the agent of the DIP Facility and counsel thereto; (h) First Lien Credit Agreement Agent and
counsel thereto; (i) the Second Lien Credit Agreement Agent and counsel thereto; (j) the agent of
the First Lien Notes and counsel thereto; and (k) any party that has requested notice pursuant to
Bankruptcy Rule 2002. The Debtors submit that in light of the nature of the relief requested, no
other or further notice need be given.
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WHEREFORE, the Debtors request entry of the Order, substantially in the form attached
hereto as Exhibit A, (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
Case 24-11217-BLS Doc 45 Filed 06/10/24 Page 8 of 12
Exhibit A
Proposed Order
Case 24-11217-BLS Doc 45 Filed 06/10/24 Page 9 of 12
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.
)
(Joint Administration Requested)
)
Re: Docket No. __
ORDER AUTHORIZING THE DEBTORS TO FILE
UNDER SEAL THE FEE LETTERS RELATED TO THE DIP FACILITY
Upon the motion (the “Motion”)2 of the above-captioned debtors and debtors in possession
(collectively, the “Debtors”) for the entry of an order (this “Order”), (a) authorizing the Debtors to
file the Fee Letters under seal; (b) directing that the Fee Letters shall remain under seal and not be
made available to anyone, without the prior written consent of both the Debtors and the DIP Agent,
except to (i) the Court, (ii) the U.S. Trustee, (iii) counsel to the Committee, and (iv) any other party
as may be ordered by the Court or agreed to by the Debtors and the DIP Agent, in each case under
appropriate confidentiality agreements reasonably satisfactory to the Debtors and the DIP Agent
that preserve the confidentiality of the Fee Letters (and any information derived therefrom); and
(c) granting related relief; all as more fully set forth in the Motion; and this Court having
jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334 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.
1 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.
Case 24-11217-BLS Doc 45 Filed 06/10/24 Page 10 of 12
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§ 157(b)(2); and this Court having found that this Court may enter a final order consistent with
Article III of the United States Constitution; and this Court having found that venue of this
proceeding and the Motion in this district is proper pursuant to 28 U.S.C. §§ 1408 and 1409; and
this Court having found that the relief requested in the Motion 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 as set forth herein.
2.
The Debtors are authorized to file under seal the Fee Letters. The Fee Letters shall
remain under seal, and shall not be made available to anyone, other than as provided in paragraph
3 of this Order, without the prior written consent of the Debtors and the DIP Agent or further order
of the Court.
3.
The Debtors are authorized to cause the unsealed versions of the Fee Letters to be
served on and made available, on a confidential basis, to: (a) the Court; (b) the U.S. Trustee;
(c) counsel to the Committee; and (d) any other party as may be ordered by the Court or agreed to
by the Debtors and the DIP Agent in each case under appropriate confidentiality agreements
reasonably satisfactory to the Debtors and the DIP Agent that preserve the confidentiality of the
Fee Letters (and any information derived therefrom).
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4.
The Debtors and any party authorized to receive the sealed Fee Letters pursuant to
this Order is authorized to and shall, subject to Local Rule 9018-1 and without further order of the
Court: (a) redact specific references to the information set forth therein from pleadings filed on
the public docket maintained in these chapter 11 cases; and (b) not use or refer to information
contained in the Fee Letters in any hearing unless appropriate safeguards have been put in place
to protect the confidentiality of the information.
5.
Any Bankruptcy Rule (including Bankruptcy Rule 6004(h)) or Local Rule that
might otherwise delay the effectiveness of this Order is hereby waived, and the terms and
conditions of this Order shall be effective and enforceable immediately upon its entry.
6.
This Order is without prejudice to the rights of any party in interest to seek to unseal
and make public any portion of the material filed under seal.
7.
The Debtors are authorized to take all actions necessary to effectuate the relief
granted pursuant to this Order in accordance with the Motion.
8.
This Court retains jurisdiction with respect to all matters arising from or related to
the implementation, interpretation, and enforcement of this Order.
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