Vyaire - COC - Utilities Motion Final Order Near Final
- Date
- 2024-07-03
Summary
A blackline of a proposed final order, filed July 3, 2024 as Doc 144-2 in In re: Vyaire Medical, Inc., et al., Case No. 24-11217 (BLS), a chapter 11 case in the United States Bankruptcy Court for the District of Delaware. The proposed order would grant the Debtors' motion on a final basis, approve their proposed adequate assurance of payment for future utility services, approve procedures for resolving additional assurance requests, and prohibit utility providers from altering, refusing or discontinuing services over unpaid prepetition charges. It provides for an Adequate Assurance Deposit of $56,100 held in a segregated account and deposited within twenty days of the Petition Date, and for 14 days' notice of additions to the Utility Providers List. The order cites 28 U.S.C. § 1334 and section 366 of the Bankruptcy Code, is marked Exhibit 2 and runs nine pages.
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Full text
Case 24-11217-BLS Doc 144-2 Filed 07/03/24 Page 1 of 9
Exhibit 2
Blackline
Case 24-11217-BLS Doc 144-2 Filed 07/03/24 Page 2 of 9
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 Administerationed
Requested)
)
) Re: Docket NoNos. __10, 93
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); and this Court having found that this Court may
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 144-2 Filed 07/03/24 Page 3 of 9
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.
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. The Debtors shall provide
the official committee of unsecured creditors (the “Committee”) and counsel to the 1L Ad Hoc
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Group with all material information regarding the Adequate Assurance Deposit and the
segregated account, including, without limitation, its balance, upon request.
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, the Committee, and counsel to the 1L Ad Hoc Group 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 such Utility Provider with a copy of the Final Order, including the Adequate
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Assurance Procedures, and provide such Utility Provider 14 days’ notice to object to the
inclusion of such Utility Provider on the Utility Providers List, and provide counsel to the 1L Ad
Hoc Group and the Committee with 14 days’ notice of 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
10166-0193, Attn.: Scott J. Greenberg (SGreenberg@gibsondunn.com),
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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) proposed counsel to the Committee,
(i) McDermott Will & Emery LLP, The Brandywine Building, 1000 N.
West Street, Suite 1400, Wilmington, Delaware 19801, Attn.: David Hurst
(dhurst@mwe.com) and Maris Kandestin (mkandestin@mwe.com) and
(ii) McDermott Will & Emery LLP, One Vanderbilt Avenue, New York,
NY 10017-3852, Attn: Darren Azman (dazman@mwe.com) and Kristin
Going (kgoing@mwe.com); (e) 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
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“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 Committee and 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.
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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
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, provided, however, that nothing in the Motion or this Final Order
constitutes Court approval of the Restructuring Support Agreement.
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
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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.
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).
15. 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.
16. 18. Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of this
Final Order are immediately effective and enforceable upon its entry.
17. 19. The Debtors are authorized to take all actions necessary to effectuate the relief
granted in this Final Order in accordance with the Motion.
18. 20. This Court retains jurisdiction with respect to all matters arising from or
related to the implementation, interpretation, and enforcement of this Final Order.
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