Vyaire - COC - Utilities Motion Final Order Near Final
- Date
- 2024-07-03
Summary
Exhibit 1 to Doc 144-1, filed July 3, 2024 in In re Vyaire Medical, Inc., et al., Case No. 24-11217 (BLS), a chapter 11 case in the U.S. Bankruptcy Court for the District of Delaware: a revised final order on the debtors' utilities motion. It grants the motion on a final basis, approves the proposed adequate assurance of payment for future utility services and the procedures for additional assurance requests, and bars utility providers from altering, refusing or discontinuing service over unpaid prepetition charges. It authorizes an adequate assurance deposit of $56,100 in a segregated account, with disbursement and replenishment procedures and notice to the creditors' committee. It also sets terms for adding or removing utility providers and for a determination hearing under section 366(c)(3). The 9-page order cites 28 U.S.C. §§ 157 and 1334 and runs to eighteen numbered paragraphs.
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Case 24-11217-BLS Doc 144-1 Filed 07/03/24 Page 1 of 9
Exhibit 1
Revised Final Order
Case 24-11217-BLS Doc 144-1 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 Administered)
)
) Re: Docket Nos. 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 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
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’ 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 144-1 Filed 07/03/24 Page 3 of 9
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
Group with all material information regarding the Adequate Assurance Deposit and the segregated
account, including, without limitation, its balance, upon request.
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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 Assurance Procedures, 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
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Case 24-11217-BLS Doc 144-1 Filed 07/03/24 Page 5 of 9
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), 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
4
Case 24-11217-BLS Doc 144-1 Filed 07/03/24 Page 6 of 9
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); 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 “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
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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.
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;
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(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
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.
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15. 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. Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of this Final
Order are immediately effective and enforceable upon its entry.
17. The Debtors are authorized to take all actions necessary to effectuate the relief
granted in this Final Order in accordance with the Motion.
18. 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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