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 (BLS)
)
Debtors.
)
(Jointly Administered)
)
Re: Docket No. 7
INTERIM ORDER (I) AUTHORIZING DEBTORS TO PAY
PREPETITION CLAIMS OF CERTAIN CRITICAL VENDORS, FOREIGN
VENDORS, 503(B)(9) CLAIMANTS, AND LIEN CLAIMANTS, (II) CONFIRMING
ADMINISTRATIVE EXPENSE PRIORITY TO ALL UNDISPUTED OBLIGATIONS ON
ACCOUNT OF OUTSTANDING ORDERS, AND (III) GRANTING RELATED RELIEF
Upon the motion (the “Motion”)2 of the above-captioned debtors and debtors in possession
(collectively, the “Debtors”) for entry of an interim order (this “Interim Order”) (a) authorizing the
Debtors to pay, in the ordinary course of business, prepetition amounts owing on account of
(i) Critical Vendor Claims and Foreign Vendor Claims; (ii) 503(b)(9) Claims; and (iii) Lien
Claims; (b) confirming administrative expense priority to all undisputed obligations on account of
goods ordered by the Debtors prior to the date hereof that will not be delivered until after the
Petition Date and authorizing the Debtors to satisfy such obligations in the ordinary course of
business; and (c) 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
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.
Case 24-11217-BLS Doc 89 Filed 06/11/24 Page 1 of 8
2
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 July 9, 2024,
at 10:00 a.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 July 2, 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 Schotz P.C., 500 Delaware Avenue,
Case 24-11217-BLS Doc 89 Filed 06/11/24 Page 2 of 8
3
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.
The Debtors are authorized, but not directed, to pay all or part of, and discharge, on
a case-by-case basis, the Critical Vendor Claims on an interim basis, absent further order of the
Court.
4.
The Debtors are authorized, but not directed, to pay all or part of, and discharge, on
a case-by-case basis, the Foreign Vendor Claims on an interim basis, absent further order of the
Court.
5.
The Debtors are authorized, but not directed, to pay all or part of, and discharge, on
a case-by-case basis, the Lien Claims on an interim basis, absent further order of the Court.
Case 24-11217-BLS Doc 89 Filed 06/11/24 Page 3 of 8
4
6.
The Debtors are authorized, but not directed, to pay all or part of, and discharge, on
a case-by-case basis, the 503(b)(9) Claims on an interim basis, absent further order of the Court.
7.
The Debtors are authorized on an interim basis to negotiate, pay, and remit all
claims pursuant to this Interim Order, provided that such payments shall not exceed $5,750,000 in
the aggregate pending entry of the Final Order.
8.
All undisputed obligations related to the Outstanding Orders are granted
administrative expense priority in accordance with section 503(b)(1)(A) of the Bankruptcy Code.
9.
The Debtors are authorized, but not directed, to pay all undisputed amounts relating
to the Outstanding Orders in the ordinary course of business consistent with the parties’ customary
practices in effect prior to the Petition Date.
10.
As a condition to receiving payment hereunder, the Debtors, in their sole discretion,
may require, by written agreement, such parties to continue supplying goods or services to the
Debtors in accordance with trade terms at least as favorable to the Debtors as those practices and
programs (including credit limits, pricing, cash discounts, timing of payments, allowances, product
mix, availability, and other programs) consistent with the parties’ ordinary course practice
(collectively, the “Customary Trade Terms”). The Debtors reserve the right to require more
favorable trade terms with any party as a condition to payment of any prepetition claim.
11.
If any party accepts payment hereunder for a prepetition obligation of the Debtors
premised on compliance with the above, and thereafter fails to comply with the Customary Trade
Terms, or other such terms as agreed to by the Debtors, then, subject to entry of a final order on
the Motion from this Court: (a) any payment on account of a prepetition claim received by such
party shall be deemed, in the Debtors’ sole discretion, an improper postpetition transfer and,
therefore, immediately recoverable in cash upon written request by the Debtors; (b) upon recovery
Case 24-11217-BLS Doc 89 Filed 06/11/24 Page 4 of 8
5
by the Debtors, any prepetition claim of such party shall be reinstated as if the payment had not
been made; and (c) if there exists an outstanding postpetition balance due from the Debtors to such
party, the Debtors may elect to recharacterize and apply any payment made pursuant to the relief
requested by the Motion to such outstanding postpetition balance and such supplier or vendor will
be required to repay to the Debtors such paid amounts that exceed the postpetition obligations then
outstanding, without the right of any setoffs, claims, provisions for payment of any claims, or
otherwise.
12.
Any Critical Vendor, Foreign Vendor, 503(b)(9) Claimant, and Lien Claimant that
accepts payment from the Debtors on account of all or a portion of such party’s claim pursuant to
this Interim Order shall be deemed to (a) agree to the terms and provisions of this Interim Order
and (b) have waived, to the extent so paid, Critical Vendor Claims, Foreign Vendor Claims,
503(b)(9) Claims, or Lien Claims of any type, kind, or priority (including any reclamation claim),
against the Debtors, their assets, and properties. The Debtors shall provide a copy of this Interim
Order to any Critical Vendor, Foreign Vendor, 503(b)(9) Claimant, and/or Lien Claimant to whom
a payment is made pursuant to this Interim Order.
13.
Nothing herein shall impair or prejudice the Debtors’ ability to contest, in their sole
discretion, the extent, perfection, priority, validity, or amounts of any claims held by any Critical
Vendor, Foreign Vendor, 503(b)(9) Claimant, and Lien Claimant. The Debtors do not concede
that any claims satisfied pursuant to this Interim Order are valid, and the Debtors expressly reserve
all rights to contest the extent, validity, or perfection, or to seek the avoidance of all such liens, or
the priority of such claims.
14.
Notwithstanding the foregoing, prior to entry of an order granting the relief
requested in the Motion on a final basis, the Debtors are not authorized to pay any prepetition
Case 24-11217-BLS Doc 89 Filed 06/11/24 Page 5 of 8
6
amounts on account of Critical Vendor Claims, Foreign Vendor Claims, 503(b)(9) Claims, or Lien
Claims before the applicable due dates of such claims.
15.
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, provided, however, that nothing in the Motion or this Interim
Order constitutes Court approval of the Restructuring Support Agreement.
16.
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.
17.
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
Interim Order.
18.
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
Case 24-11217-BLS Doc 89 Filed 06/11/24 Page 6 of 8
7
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.
19.
The Debtors are authorized 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.
20.
The Debtors have demonstrated that the requested relief is “necessary to avoid
immediate and irreparable harm,” as contemplated by Bankruptcy Rule 6003.
21.
Nothing in this Interim Order authorizes the Debtors to accelerate any payments
not otherwise due prior to the date of the Final Hearing.
22.
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.
23.
Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of this Interim
Order are immediately effective and enforceable upon its entry.
Case 24-11217-BLS Doc 89 Filed 06/11/24 Page 7 of 8
8
24.
The Debtors are authorized to take all actions necessary to effectuate the relief
granted in this Interim Order in accordance with the Motion.
25.
This Court retains jurisdiction with respect to all matters arising from or related to
the implementation, interpretation, and enforcement of this Interim Order.
BRENDAN L. SHANNON
UNITED STATES BANKRUPTCY JUDGE
Dated: June 11th, 2024
Wilmington, Delaware
Case 24-11217-BLS Doc 89 Filed 06/11/24 Page 8 of 8