Interim Order (I) Authorizing
- Date
- 2024-06-11
Summary
An interim order entered June 11, 2024 as Doc 85 in the jointly administered Chapter 11 cases of Vyaire Medical, Inc., et al., Case No. 24-11217 (BLS), in the United States Bankruptcy Court for the District of Delaware, on the debtors' motion at Docket No. 6. The order grants the motion on an interim basis, authorizing the debtors to pay prepetition wages, salaries, other compensation and reimbursable expenses and to continue employee benefits programs. It caps those prepetition payments at $5,404,200 in the aggregate pending a final order and bars payments to insiders under bonus or incentive programs. It sets a final hearing for July 9, 2024, with objections due July 2, 2024, and modifies the automatic stay for workers' compensation claims. The 7-page order is signed by Bankruptcy Judge Brendan L. Shannon.
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Case 24-11217-BLS Doc 85 Filed 06/11/24 Page 1 of 7
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. 6
INTERIM ORDER (I) AUTHORIZING
THE DEBTORS TO (A) PAY PREPETITION
WAGES, SALARIES, OTHER COMPENSATION, AND
REIMBURSABLE EXPENSES AND (B) CONTINUE EMPLOYEE
BENEFITS PROGRAMS, AND (II) 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) authorizing
the Debtors (i) to pay undisputed prepetition wages, salaries, other compensation, and
reimbursable expenses on account of the Employee Compensation and Benefits and
(ii) to continue employee benefits programs in the ordinary course of business, including payment
of certain undisputed prepetition obligations related thereto; (b) scheduling a final hearing to
consider approval of the Motion on a final basis; 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
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 85 Filed 06/11/24 Page 2 of 7
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 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,
2
Case 24-11217-BLS Doc 85 Filed 06/11/24 Page 3 of 7
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 continue and/or modify, change,
and discontinue the Employee Compensation and Benefits Programs and to implement new
programs, policies, and benefits, in the ordinary course of business during these chapter 11 cases
and without the need for further Court approval, subject to applicable law. For the avoidance of
doubt, nothing in this Interim Order should be construed as authorizing the Debtors to: (i) pay any
amounts to Insiders on account of any bonus or incentive programs; or (ii) make any payment on
account of the Employee Compensation and Benefits Programs that are outside the ordinary course
of business without prior Court approval.
3
Case 24-11217-BLS Doc 85 Filed 06/11/24 Page 4 of 7
4. The Debtors are authorized, but not directed, in their discretion, to pay and honor
prepetition amounts related to the Employee Compensation and Benefits Programs pursuant to this
Interim Order; provided that such payments shall not exceed $5,404,200 in the aggregate pending
entry of a final order, provided further that the Debtors are not authorized to pay any prepetition
amounts on account of the Non-Insider Incentive and Retention Programs pursuant to this Interim
Order.
5. Nothing herein shall be deemed to authorize the payment of any prepetition
amounts above the statutory cap imposed by section 507(a)(4) and 507(a)(5) of the Bankruptcy
Code with respect to the prepetition amounts owed on account of the Employee Compensation and
Benefits Program, except upon further order of this Court.
6. Nothing herein shall be deemed to authorize the payment of any prepetition
amounts in satisfaction of bonus or severance obligations, or which may implicate or be subject to
section 503(c) of the Bankruptcy Code; provided that nothing in this Interim Order shall prejudice
the Debtors’ ability to seek approval of relief pursuant to section 503(c) of the Bankruptcy Code
at a later time.
7. Pursuant to section 362(d) of the Bankruptcy Code: (a) the automatic stay is
modified so that Employees are authorized to proceed with their workers’ compensation claims in
the appropriate judicial or administrative forum under the Workers’ Compensation Program, and
the Debtors are authorized to pay all undisputed prepetition amounts relating thereto in the
ordinary course of business; and (b) the notice requirements pursuant to Bankruptcy Rule 4001(d)
with respect to clause (a) are waived. This modification of the automatic stay pertains solely to
claims under the Workers’ Compensation Program, and any such claims must be pursued in
accordance with the applicable Workers’ Compensation Program. Payment on account of any
4
Case 24-11217-BLS Doc 85 Filed 06/11/24 Page 5 of 7
recoveries obtained in connection with a claim brought pursuant to this paragraph is limited to the
terms and conditions of the applicable Workers’ Compensation Program, including with regard to
any policy limits or caps.
8. 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.
9. 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.
5
Case 24-11217-BLS Doc 85 Filed 06/11/24 Page 6 of 7
10. 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.
11. 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.
12. 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.
13. The Debtors have demonstrated that the requested relief is “necessary to avoid
immediate and irreparable harm,” as contemplated by Bankruptcy Rule 6003.
14. Nothing in this Interim Order authorizes the Debtors to accelerate any payments
not otherwise due prior to the date of the Final Hearing.
15. The contents of the Motion satisfy the requirements of Bankruptcy Rule 6003(b).
16. 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.
6
Case 24-11217-BLS Doc 85 Filed 06/11/24 Page 7 of 7
17. Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of this Interim
Order are immediately effective and enforceable upon its entry.
18. The Debtors are authorized to take all actions necessary to effectuate the relief
granted in this Interim Order in accordance with the Motion.
19. This Court retains jurisdiction with respect to all matters arising from or related to
the implementation, interpretation, and enforcement of this Interim Order.
Dated: June 11th, 2024 BRENDAN L. SHANNON
Wilmington, Delaware UNITED STATES BANKRUPTCY JUDGE
7
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