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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.
)
(Jointly Administered)
)
)
Hearing Date: July 9, 2024, at 10:00 a.m. (ET)
)
Obj. Deadline: July 2, 2024, at 4:00 p.m. (ET)
MOTION OF DEBTORS SEEKING ENTRY OF AN ORDER
(I) SETTING BAR DATES FOR FILING PROOFS OF CLAIM, INCLUDING
UNDER SECTION 503(B)(9), (II) ESTABLISHING AMENDED SCHEDULES BAR
DATE AND REJECTION DAMAGES BAR DATE, (III) APPROVING THE FORM OF
AND MANNER FOR FILING PROOFS OF CLAIM, INCLUDING SECTION 503(B)(9)
REQUESTS, AND (IV) APPROVING FORM AND MANNER OF NOTICE THEREOF
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
The Debtors seek entry of an order, substantially in the form attached hereto as
Exhibit A (the “Bar Date Order”): (a) establishing August 2, 2024 at 11:59 p.m. (prevailing
Eastern Time) as the last date and time for each entity3 (including, without limitation, individuals,
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
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 Petitions and First Day Motions (the “First Day Declaration”), filed on
June 10, 2024 [Docket No. 15] 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.
3
Except as otherwise defined herein, all terms specifically defined in the Bankruptcy Code shall have those
meanings ascribed to them by the Bankruptcy Code. In particular, as used herein: (a) the term “claim” has the
meaning given to it in section 101(5) of the Bankruptcy Code; (b) the term “entity” has the meaning given to it in
section 101(15) of the Bankruptcy Code; (c) the term “governmental unit” has the meaning given to it in
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partnerships, corporations, joint ventures, and trusts, but other than governmental units) to file
proofs of claim on account of prepetition claims, including requests for payment under
section 503(b)(9) of the Bankruptcy Code, against any Debtor (the “General Bar Date”); (b) solely
as to governmental units, establishing December 9, 2024 at 11:59 p.m. (prevailing Eastern Time)
as the last date and time for each such governmental unit to file proofs of claim on account of
prepetition claims against any Debtor (the “Governmental Bar Date”); (c) establishing the deadline
by which any entity asserting a claim arising from the Debtors’ amendment of the Debtors’
Schedules must file proofs of claim against any Debtor (the “Amended Schedules Bar Date”);
(d) establishing the deadline by which any entity asserting a claim arising from the Debtors’
rejection of an executory contract or unexpired lease must file proofs of claim against any Debtor
(the “Rejection Damages Bar Date” and, together with the General Bar Date, Governmental Bar
Date, and Amended Schedules Bar Date, and as may be applicable, the “Bar Date” or “Bar
Dates”); (e) approving the proposed proof of claim form, substantially in the form attached to the
Bar Date Order as Exhibit 1 (the “Proof of Claim Form”); (f) approving the proposed form and
manner of bar date notice, substantially in the form attached to the Bar Date Order as Exhibit 2
(the “Bar Date Notice”); and (g) approving the proposed form and manner of publication notice,
substantially in the form attached to the Bar Date Order as Exhibit 3 (the “Publication Notice”).
Jurisdiction and Venue
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 United States Bankruptcy Court
for the District of Delaware (the “Court”) under 28 U.S.C. § 157 and the Amended Standing Order
section 101(27) of the Bankruptcy Code; and (d) the term “person” has the meaning given to it in section 101(41)
of the Bankruptcy Code.
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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.
Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409.
The statutory bases for the relief requested herein are sections 105(a), 501, 502 and
1111(a) of title 11 of the United States Code, 11 U.S.C. §§ 101–1532 (the “Bankruptcy Code”),
rules 2002(a)(7), (f), (1), 3003(c), and 5005(a) of the Federal Rules of Bankruptcy Procedure
(the “Bankruptcy Rules”), and Local Rules 1009-2, 2002-1, and 3003-1(a).
Background
Vyaire Medical, Inc., together with its direct and indirect subsidiaries (collectively,
“Vyaire” or the “Company”), is a global company focused on developing products and providing
related services for the diagnosis, treatment, and monitoring of various cardiology, pulmonology,
and respiratory health conditions. With a 70-year history of pioneering breathing technology, the
integrated solutions offered by the Company help enable, enhance, and extend
lives. Headquartered in Mettawa, Illinois, Vyaire operates approximately 27 offices and
manufacturing facilities, and employs approximately 950 individuals around the world. The
Company has a global reach, and Vyaire products are available in more than 100 countries. Its
customers are the hospitals, health centers, and private practice facilities delivering life-enhancing
products and services to patients every day.
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On June 9, 2024 (the “Petition Date”), Vyaire Medical, Inc. and certain of its
subsidiaries filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code. The
Debtors are operating their business and managing their property as debtors in possession pursuant
to sections 1107(a) and 1108 of the Bankruptcy Code. On June 11, 2024, the Court entered an
order authorizing the procedural consolidation and joint administration of these chapter 11 cases
pursuant to Bankruptcy Rule 1015(b) and Local Rule 1015-1. See Docket No. 84. No request for
the appointment of a trustee or examiner has been made in these chapter 11 cases, and no official
committees have been appointed or designated.
The Bar Dates
I.
Summary
Bankruptcy Rule 3003(c)(3) provides that the Court shall fix the time within which
proofs of claim must be filed in a chapter 11 case pursuant to section 501 of the Bankruptcy Code.
Moreover, Bankruptcy Rule 3003(c)(2) provides that any creditor who has a claim against the
Debtors that arose before the Petition Date and whose claim is not scheduled in the Debtors’
schedules of assets and liabilities, schedules of executory contracts and unexpired leases, or
statements of financial affairs (collectively, the “Schedules”) or whose claim is listed on the
Schedules as disputed, contingent, or unliquidated must file a proof of claim. As set forth below,
the Debtors propose that the bar date to file any such claims will be at least 21 days following the
service of the Bar Date Notice. Section 502(b)(9) of the Bankruptcy Code further provides that
governmental units shall have a minimum of 180 days after the entry of the order for relief to file
proofs of claim. The Debtors anticipate that their Schedules will be filed on or about July 8, 2024;
accordingly, service of the Bar Date Notice will be provided shortly thereafter. The proposed
timeline will give all parties in interest adequate notice of the Bar Dates and an opportunity to
respond.
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II.
Bar Dates
Each entity that asserts a claim against the Debtors that arose before the Petition
Date, shall be required to file an original proof of claim, substantially in the form attached to the
Bar Date Order as Exhibit 1 or Official Form 410.4 More specifically, the Debtors propose the
following deadlines:
a.
General Bar Date. The Debtors request that the Court establish
August 2, 2024 at 11:59 p.m. prevailing Eastern Time, as the General Bar
Date. The General Bar Date would be the date and time by which all
entities, other than governmental units holding prepetition claims, must file
Proofs of Claim, including requests for payment under section
503(b)(9), so that such proofs of claim are actually received by the Debtors’
notice and claims agent, Omni Agent Solutions, Inc. (“Omni”) by the
General Bar Date, unless such entity’s claim falls within one of the
exceptions set forth in this Motion. Subject to these exceptions, the General
Bar Date would apply to all claims against the Debtors that arose or are
deemed to have arisen before the Petition Date, including secured claims,
unsecured priority claims, unsecured non-priority claims, contingent
claims, unliquidated claims, disputed claims, and rejection damage claims
for executory contracts and unexpired leases that have already been rejected
by order of the Court in these chapter 11 cases.
b.
Governmental Bar Date. Pursuant to section 502(b)(9) of the Bankruptcy
Code, the Debtors request that December 9, 2024 at 11:59 p.m., prevailing
Eastern Time, be established as the Governmental Bar Date in these
chapter 11 cases. The Governmental Bar Date would apply to all
governmental units holding claims against the Debtors (whether secured,
unsecured priority, or unsecured non-priority) that arose before the Petition
Date, including governmental units with claims against the Debtors for
unpaid taxes, whether such claims arise from prepetition tax years or
periods, or prepetition transactions to which the Debtors were a party. All
governmental units holding such claims against the Debtors would be
4
The Debtors’ claims and noticing agent maintains an Online Portal (as defined below) allowing potential
claimholders to submit a proof of claim (in substantially the same form as any hard copy version) and
electronically sign and submit such proof of claim. The Online Portal provides a secure, simple portal for creditors
to participate in the chapter 11 cases while tracking original e-signatures. This also eases the administrative
burden on and costs to the Debtors estates associated with processing hard-copy proofs of claim. The Debtors
intend to accept proofs of claim through the Online Portal under “Claims” and by clicking on “Submit a Proof of
Claim,” as further described below and subject to the same limitations and requirements of all other proofs of
claim.
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required to file proofs of claim so that such proofs of claim are actually
received by Omni by the Governmental Bar Date.
c.
Amended Schedules Bar Date. If the Debtors amend or supplement their
Schedules to reduce the undisputed, noncontingent, and liquidated amount
of a claim listed in the Schedules, to change the nature or classification of a
claim against the Debtors reflected in the Schedules, or to add a new claim
to the Schedules, the affected creditor, if it so chooses, is required to file a
proof of claim or amend any previously filed proof of claim regarding the
amended scheduled claim on or before the later of (a) the General Bar Date
or the Governmental Bar Date, as applicable, to such claim, and
(b) 11:59 p.m., prevailing Eastern Time, on the date that is 21 days from the
date on which the Debtors provide notice of the amendment to the
Schedules.
d.
Rejection Damages Bar Date. In the event that an order authorizing the
rejection of an executory contract or unexpired lease is entered, except as
otherwise set forth in such order, the Debtors propose that the Court
establish the later of (i) the General Bar Date, (ii) 11:59 p.m., prevailing
Eastern Time, on the date that is 30 days after the later of (A) entry of an
order approving the rejection of any executory contract or unexpired lease
of the Debtors or (B) the effective date of a rejection of any executory
contract or unexpired lease of the Debtors pursuant to operation of any
Court order. All entities holding such claims against the Debtors would be
required to file proofs of claim so that such proofs are actually received by
Omni by the applicable Rejection Damages Bar Date.
Procedures for Filing Proofs of Claim
I.
Parties Required to File Proofs of Claim
Except as otherwise set forth herein, the Debtors propose that the following entities
holding claims against the Debtors arising before the Petition Date be required to file proofs of
claim on or before the applicable Bar Date:
a.
any entity whose claim against a Debtor is not listed in the applicable
Debtor’s Schedules or is listed as contingent, unliquidated, or disputed if
such entity desires to participate in any of these chapter 11 cases or share in
any distribution in any of these chapter 11 cases;
b.
any entity that believes that its claim is improperly classified in the
Schedules or is listed in an incorrect amount and that desires to have its
claim allowed in a classification or amount other than that identified in the
Schedules;
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c.
any entity that believes that its prepetition claims as listed in the Schedules
is not an obligation of the specific Debtor against which the claim is listed
and that desires to have its claim allowed against a Debtor other than that
identified in the Schedules; and
d.
any entity that believes that its claim against a Debtor is or may be an
administrative
expense
pursuant
to
section
503(b)(9)
of
the
Bankruptcy Code.
II.
Parties Exempted from the Bar Date
The Debtors propose that the following entities whose claims otherwise would be
subject to the General Bar Date need not file proofs of claim:
a.
any entity that already has filed a signed proof of claim against the
applicable Debtor(s) with the Clerk of the Court or with Omni in a form
substantially similar to Official Form 410;
b.
any entity whose claim is listed on the Schedules if: (i) the claim is not
scheduled as any of “disputed,” “contingent,” or “unliquidated;” (ii) such
entity agrees with the amount, nature, and priority of the claim as set forth
in the Schedules; and (iii) such entity does not dispute that its claim is an
obligation only of the specific Debtor against which the claim is listed in
the Schedules;
c.
any entity whose claim has previously been allowed by order of the Court;
d.
any entity whose claim has been paid in full or is otherwise fully satisfied
by the Debtors pursuant to the Bankruptcy Code or pursuant to an order of
the Court;
e.
any Debtor having a claim against another Debtor;
f.
any entity whose claim is solely against any of the Debtors’ non-Debtor
affiliates;
g.
any non-Debtor subsidiary or affiliate having a claim against a Debtor;
h.
any entity that holds an interest in any of the Debtors, which interest is based
exclusively on the ownership of common stock, membership interests,
partnership interests, or rights to purchase, sell, or subscribe to such an
interest; provided that interest holders who wish to assert claims (as
opposed to ownership interests) against any of the Debtors, including claims
that arise out of or relate to the ownership or purchase of an interest, must
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file proofs of claim on or before the applicable Bar Date unless another
exception identified herein applies;5
i.
a current employee of the Debtors, if an order of this Court authorized the
Debtors to honor such claim in the ordinary course of business as a wage,
commission, or benefit; provided that a current employee must submit a
proof of claim by the General Bar Date for all other claims arising before
the Petition Date, including (but not limited to) claims for wrongful
termination, discrimination, harassment, hostile work environment, and/or
retaliation;
j.
any current officer, director, or employee for claims based on
indemnification, contribution, or reimbursement;
k.
any entity holding a claim for which a separate deadline is fixed by this
Court;
l.
any entity holding a claim allowable under sections 503(b) and 507(a)(2) of
the Bankruptcy Code as an expense of administration incurred in the
ordinary course, provided that any entity asserting a claim entitled to
priority under section 503(b)(9) of the Bankruptcy Code must assert such
claims by filing a proof of claim on or prior to the General Bar Date; and
m.
any person or entity that is exempt from filing a Proof of Claim pursuant to
an order of the Court in these chapter 11 cases, including, without limitation,
pursuant to any orders authorizing the Debtors’ proposed postpetition
financing (whether on an interim or final basis) (any such orders, the “DIP
Orders”).
III.
The Proof of Claim Form
The Debtors have prepared and request that the Court approve the Proof of Claim
Form substantially in the form attached to the Bar Date Order as Exhibit 1, which, although based
on Official Form 410, has been modified to allow creditors to request payment for claims under
section 503(b)(9) of the Bankruptcy Code. In addition, with the assistance of Omni, the Debtors
propose to provide each of the creditors listed on the Debtors’ Schedules with a “personalized”
Proof of Claim Form, which will indicate how the Debtors have scheduled the creditor’s claim in
5
The Debtors reserve all rights with respect to any such claims, including to, inter alia, assert that such claims are
subject to subordination pursuant to Bankruptcy Code section 510(b).
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the Schedules, including: (a) the identity of the Debtor against which the creditor’s claim is
scheduled; (b) the amount of the scheduled claim, if any; (c) whether the claim is listed as
contingent, unliquidated, or disputed; and (d) whether the claim is listed as secured, unsecured
priority, or unsecured non-priority.
If a creditor disagrees with the information set forth on the “personalized” Proof of
Claim Form, the creditor is required to file a proof of claim identifying the Debtor against which
the creditor is asserting a claim and the amount and type of such claim. Additionally, creditors
may choose not to use the personalized Proof of Claim Form and instead submit proofs of claim
on Official Form 410. So long as a creditor otherwise complies in all respects with the Bar Date
Order, the creditor can submit their proof of claim by hard copy or through Omni’s secure online
portal, available at: https://omniagentsolutions.com/Vyaire (the “Online Portal”).
IV.
Requirements for Preparing and Filing Proofs of Claim
With respect to preparing and filing a proof of claim, the Debtors propose that each
proof of claim be required to be consistent with the following:
a.
Contents. Each proof of claim must: (i) be written in English; (ii) include
a claim amount denominated in United States dollars using, if applicable,
the exchange rate as of 5:00 p.m., prevailing Eastern Time, on the Petition
Date (and to the extent such claim is converted to United States dollars, state
the rate used in such conversion); (iii) conform substantially with the Proof
of Claim Form provided by the Debtors or Official Form 410; and (iv) be
signed by the claimant or by an authorized agent or legal representative of
the claimant.
b.
Section 503(b)(9) Claim. Any proof of claim asserting a claim entitled to
priority under section 503(b)(9) must also: (i) include the value of the goods
delivered to and received by the Debtors in the 20 days before the Petition
Date; and (ii) attach any documentation identifying the particular invoices
for which the 503(b)(9) claim is being asserted.
c.
Original Signatures Required. Only original proofs of claim (whether
submitted
by
hard
copy
or
through
the
Online
Portal
at
https://omniagentsolutions.com/Vyaire) will be deemed acceptable for
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purposes of claims administration.6 Copies of proofs of claim or proofs of
claim sent by facsimile or electronic mail will not be accepted.
d.
Identification of the Debtor Entity. Each proof of claim must clearly
identify the Debtor against which a claim is asserted, including the
individual Debtor’s case number. A proof of claim filed under the joint
administration case number or otherwise without identifying a specific
Debtor, will be deemed as filed only against Vyaire Medical, Inc.
e.
Claim Against Multiple Debtor Entities. Unless otherwise ordered by the
Court, each proof of claim must state a claim against only one Debtor and
clearly indicate the Debtor against which the claim is asserted. To the extent
more than one Debtor is listed on the proof of claim, such claim may be
treated as if filed only against the first-listed Debtor.
f.
Supporting Documentation. Each proof of claim must include supporting
documentation pursuant Bankruptcy Rules 3001(c) and 3001(d). If,
however, such documentation is voluminous, such proof of claim may
include a summary of such documentation or an explanation as to why such
documentation is not available; provided that any creditor that includes only
a summary of such documentation shall be required to transmit all such
supporting documentation to Debtors’ counsel upon request no later than
10 days from the date of such request.
g.
Timely Service. Each proof of claim must be filed, including supporting
documentation, so as to be actually received by Omni on or before the
General Bar Date or the Governmental Bar Date (or, where applicable, on
or before any other Bar Date as set forth herein or by order of the Court)
either
by:
(i)
electronically
through
the
Online
Portal
at
https://omniagentsolutions.com/Vyaire under “Claims” and by clicking on
“Submit a Proof of Claim,” or (ii) by U.S. Mail, overnight mail, or other
hand delivery system, at the following address:
By First Class Mail, Overnight Courier or Hand Delivery to:
Vyaire Medical, Inc. et al. Claims Processing
c/o Omni Agent Solutions, Inc.
5955 De Soto Avenue, Suite 100
Woodland Hills, CA 91367
PROOFS OF CLAIM SUBMITTED BY FACSIMILE OR ELECTRONIC MAIL WILL
NOT BE ACCEPTED.
6
Proofs of claim submitted by hard copy may not be electronically signed unless otherwise agreed to in advance
by the Debtors.
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h.
Receipt of Service. Claimants wishing to receive acknowledgment that
their paper proofs of claim were received by Omni must submit (i) a copy
of the Proof of Claim Form (in addition to the original Proof of Claim Form
sent to Omni) and (ii) a self-addressed, stamped envelope.
Consequences of Failure to File a Proof of Claim
Pursuant to Bankruptcy Rule 3003(c)(2), the Debtors propose that any entity who
is required, but fails, to file a proof of claim pursuant to the Bar Date Order on or before the
applicable Bar Date shall be prohibited from voting to accept or reject any chapter 11 plan filed in
these chapter 11 cases and participating in any distribution in these chapter 11 cases on account of
such claim.
Procedures for Providing Notice of the Bar Dates
The Debtors propose the following procedures for providing mailing and
publication notice of the Bar Dates.
V.
Mailing of Bar Date Notices.
Pursuant to Bankruptcy Rule 2002(a)(7), no later than 3 days after the later of (i) the
date the Debtors file their Schedules with this Court or (ii) entry of the Bar Date Order, the Debtors
propose to cause the Bar Date Notice and a Proof of Claim Form, (collectively, the “Bar Date
Package”) to be mailed via first class mail to the following entities:
a.
the U.S. Trustee;
b.
the holders of the 30 largest unsecured claims against the Debtors (on a
consolidated basis);
c.
counsel to the Committee;
d.
Gibson, Dunn & Crutcher LLP as counsel to 1L Ad Hoc Group;
e.
the DIP Agent and counsel thereto;
f.
the First Lien Credit Agreement Agent and counsel thereto;
g.
the Second Lien Credit Agreement Agent and counsel thereto;
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h.
the First Lien Notes Agent and counsel thereto;
i.
all creditors and other known holders of claims against the Debtors as of the
date of entry of the Bar Date Order, including all entities listed in the
Schedules as holding claims against the Debtors;
j.
all entities that have requested notice of the proceedings in these chapter 11
cases pursuant to Bankruptcy Rule 2002 as of the date of the Bar Date
Order;
k.
all entities that have filed proofs of claim in these chapter 11 cases as of the
date of the Bar Date Order;
l.
all known non-Debtor equity and interest holders of the Debtors as of the
date of the Bar Date Order;
m.
all entities that are party to executory contracts and unexpired leases with
the Debtors;
n.
all entities that are party to litigation with the Debtors;
o.
all current employees and former employees who were employed by the
Debtors in the 24 months prior to the Petition Date (to the extent that contact
information for such former employees is available in the Debtors’ records
after reasonable inquiry);
p.
the U.S. Attorney’s Office for the District of Delaware;
q.
the office of the attorney general for each state in which the Debtors
maintain or conduct business;
r.
the Internal Revenue Service;
s.
all other taxing authorities for the jurisdictions in which the Debtors
maintain or conduct business; and
t.
the U.S. Securities and Exchange Commission.
The proposed Bar Date Notice notifies the parties of the Bar Dates and contains
information regarding who must file a proof of claim, the procedures for filing a proof of claim,
and the consequences of failure to timely file a proof of claim. The Debtors request the Court
approve the use of the Bar Date Notice.
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VI.
Supplemental Mailings.
After the initial mailing of the Bar Date Package, the Debtors may, in their
discretion, make supplemental mailings of notices, including in the event that: (a) notices are
returned by the post office with forwarding addresses;7 (b) certain parties acting on behalf of
parties in interest (e.g., banks and brokers with respect to equity or interest holders) decline to pass
along notices to these parties and instead return their names and addresses to the Debtors for direct
mailing; and (c) additional potential claimants become known as the result of the Bar Date noticing
process. In this regard, the Debtors request that the Court permit it to make supplemental mailings
of the Bar Date Package in these and similar circumstances at any time up to 14 days in advance
of the Bar Date, with any such mailings deemed timely and the Bar Date being applicable to the
recipient creditors.
VII.
Publication Notice.
In the interest of ensuring that all potential claimants receive adequate notice of the
Bar Dates, in addition to providing the Bar Date Notice to known creditors, the Debtors propose
to provide notice of the Bar Dates by publication. Pursuant to Bankruptcy Rule 2002(l) and in
satisfaction of the requirements of Bankruptcy Rule 2002(a)(7), the Debtors propose to publish the
Publication Notice on one occasion in The New York Times (national edition), at least 21 days
before the General Bar Date. In addition, the Debtors may, in their sole discretion, publish the
Publication Notice at such times and in such local publications of general circulation in certain
areas where the Debtors have conducted operations. The Publication Notice includes a telephone
number that creditors may call to obtain copies of the Proof of Claim Form, the URL for a website
7
However, if notices are returned as “return to sender” without a forwarding address, the Debtors request that they
should not be required to mail additional notices to such creditors.
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at which creditors may obtain a copy of a Proof of Claim Form, and information concerning the
procedures and appropriate deadlines for filing a proof of claim.
Basis for Relief
VIII.
The Court Should Approve the Bar Dates and the Proposed Procedures for Filing
Proofs of Claim in These Chapter 11 Cases.
Bankruptcy Rule 3003(c)(3) generally governs the filing of proofs of claim in a
chapter 11 case and provides, in relevant part, that “[t]he court shall fix and for cause shown may
extend the time within which proofs of claim or interest may be filed.” Fed. R. Bankr.
P. 3003(c)(3). Although Bankruptcy Rule 2002(a)(7) generally provides that the clerk must give
all parties in interest a minimum of 21 days’ notice of the time fixed for filing proofs of claim
pursuant to Bankruptcy Rule 3003(c), neither the Bankruptcy Code, the Bankruptcy Rules, nor the
Local Rules specify a time by which proofs of claim must be filed in chapter 11 cases (other than
section 502(b)(9) of the Bankruptcy Code relating to governmental units).
It is well recognized that a claims bar date plays an essential role in the twin goals
of bankruptcy—preserving a debtor’s going-concern value and maximizing property available to
satisfy creditors. See Bank of Am. Nat’l Trust & Sav. Assoc. v. 203 N. LaSalle St. P’ship, 526 U.S.
434, 453 (1999). A claims bar date allows the Debtors and parties in interest to expeditiously
determine and evaluate the liabilities of the estates. The absence of such a deadline, in contrast,
would prolong creditor uncertainty, increase the costs and expenses incurred by the Debtors in
connection with the claims reconciliation process, and delay or even derail the claims process, thus
undercutting one of the principal purposes of bankruptcy law—“secur[ing] within a limited period
the prompt and effectual administration and settlement of the debtor’s estate.” See Chemetron
Corp. v. Jones, 72 F.3d 341, 346 (3d Cir. 1995).
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The procedures described herein provide creditors with ample notice and
opportunity and a clear process for filing proofs of claim and achieve administrative and judicial
efficiency. Indeed, the proposed procedures will provide comprehensive notice and clear
instructions to creditors, on the one hand, and allow these chapter 11 cases to move forward quickly
with a minimum of administrative expense and delay, on the other hand.
In addition, the Debtors request the court to allow submission of proofs of claim
via the Online Portal as well as by paper forms, to ensure an accessible and simple process. Indeed,
courts in this district routinely allow electronic submission of proofs of claim. See, e.g.,
In re Express, Inc., No. 24-10831 (KBO) (Bankr. D. Del. May 20, 2024); In re Sientra, Inc.,
No. 24-10245 (JTD) (Bankr. D. Del. Mar. 26, 2024); In re MVK FarmCo LLC, No. 23-11721
(LSS) (Bankr. D. Del. Nov. 15, 2023); In re Yellow Corp., No. 23-11069 (CTG) (Bankr. D. Del.
Sept. 13, 2023); In re PGX Holdings, Inc., No. 23-10718 (CTG) (Bankr. D. Del. Jun. 4, 2023);
In re Destination Maternity Corp., No. 19-12256 (BLS) (Bankr. D. Del. Dec. 10, 2019).
Moreover, the Debtors’ proposed procedures provide clear instructions that will
help avoid confusion or uncertainty among creditors that might lead them to file unnecessary
protective proofs of claim or multiple proofs of claim that would cause expense and delay in the
claims process for all parties. Additionally, the proposed use of a personalized Proof of Claim
Form for all known creditors is designed to both streamline the claims process and provide useful
information to creditors as to whether and how their claims are reflected in the Debtors’ Schedules.
The proposed procedures are designed to comply with the Bankruptcy Code and provide the
Debtors with flexibility in case of the need for supplemental bar dates or situations in which a
creditor’s claim status may change during these chapter 11 cases (such as in the event of contract
rejections).
Case 24-11217-BLS Doc 116 Filed 06/25/24 Page 15 of 21
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IX.
The Proposed Notice Procedures Are Reasonable and Appropriate.
Bankruptcy Rule 2002(a)(7) requires that the Debtors provide claimants at least
21 days’ notice by mail of the Bar Dates pursuant to Bankruptcy Rule 3003(c). Additionally,
Bankruptcy Rule 2002(l) provides that the Court may order notice by publication if it finds that
notice by mail is impractical or it is desirable to supplement other notice. Bankruptcy Rule 9008
also provides that the Court shall determine the form and manner of publication notice, the
newspapers used, and the frequency of publication.
In conjunction with setting deadlines to file proofs of claim, the Debtors must give
appropriate notice to interested parties. The Debtors propose to mail the Bar Date Notice to their
known creditors and, thus, must rely on publication to give notice to its unknown creditors. This
procedure is consistent with applicable case law and practice in this district. See, e.g., Mullane v.
Central Hanover Bank & Trust Co., 339 U.S. 306, 317 (1950); see also Chemetron, 72 F.3d at 346
(3d Cir. 1995). To determine the adequacy of notice given to a creditor, bankruptcy law
distinguishes between “known” and “unknown” creditors. Chemetron, 72 F.3d at 346. As the
Third Circuit explained in Chemetron, “[k]nown creditors must be provided with actual written
notice of a debtor’s bankruptcy filing and bar claims date. For unknown creditors, notification by
publication will generally suffice.” Id. (citations omitted). A “known” creditor is one whose
identity is either known or is “reasonably ascertainable by the debtor.” Id. (citing Tulsa Prof’l
Collection Serv., Inc. v. Pope, 485 U.S. 478, 490 (1988)). An “unknown” creditor is one whose
“interests are either conjectural or future or, although they could be discovered upon investigation,
do not in due course of business come to knowledge [of the debtor].” Id. (citing Mullane, 339 U.S.
at 317).
Where a creditor is known to the debtor, due process requires that the debtor must
take reasonable steps, such as direct mailing, to provide actual notice of the deadline for filing
Case 24-11217-BLS Doc 116 Filed 06/25/24 Page 16 of 21
17
proofs of claim. A creditor’s identity is “reasonably ascertainable” if that creditor can be identified
through “reasonably diligent efforts.” Mennonite Bd. of Missions v. Adams, 462 U.S. 791, 798 n.4
(1983). But this does not require the debtor to engage in “impracticable and extended
searches . . . in the name of due process.” See Mullane, 339 U.S. at 317–18. Rather, the required
search is limited to a debtor’s “books and records.” See, e.g., Chemetron, 72 F.3d at 347.
In addition, requiring entities asserting claims pursuant to section 503(b)(9) of the
Bankruptcy Code to assert such claims by filing a proof of claim on or before the General Bar Date
will ensure that the Debtors have complete information regarding the nature, validity, and amount
of such section 503(b)(9) claims while affording parties asserting section 503(b)(9) claims
appropriate and adequate notice. Moreover, this approach facilitates a more cost-effective and
efficient claims process for such creditors and, by obviating the need for the Debtors to file a
response to individual administrative expense requests, helps conserve estate resources to the
benefit of the Debtors’ creditors.8
The Debtors submit that requiring parties to assert section 503(b)(9) claims by
proof of claim on or before the General Bar Date is justified and warranted under the circumstances
of these chapter 11 cases. Indeed, courts in this district routinely fix bar dates for filing claims
under section 503(b)(9) of the Bankruptcy Code. See, e.g., In re Express, Inc., No. 24-10831
(KBO) (Bankr. D. Del. May 20, 2024); In re Sientra, Inc., No. 24-10245 (JTD) (Bankr. D. Del.
Mar. 26, 2024); In re MVK FarmCo LLC, No. 23-11721 (LSS) (Bankr. D. Del. Nov. 15, 2023);
In re Yellow Corp., No. 23-11069 (CTG) (Bankr. D. Del. Sept. 13, 2023); In re PGX Holdings,
8
For the avoidance of doubt, parties asserting administrative claims under all other sub-parts of section 503(b) of
the Bankruptcy Code must make separate requests for payment pursuant to section 503(a) of the Bankruptcy Code
or as otherwise specified by order of the Court.
Case 24-11217-BLS Doc 116 Filed 06/25/24 Page 17 of 21
18
Inc., No. 23-10718 (CTG) (Bankr. D. Del. Jun. 4, 2023); In re Destination Maternity Corp.,
No. 19-12256 (BLS) (Bankr. D. Del. Dec. 10, 2019).
The Debtors submit that the relief requested herein provides clear notice of the
General Bar Date, the Governmental Bar Date, and other Bar Dates as set forth herein in
satisfaction of the requirements of the Bankruptcy Rules and consistent with the underlying
policies of the Bankruptcy Code. Specifically, to the extent the General Bar Date is established as
proposed, the Debtors intend to cause the Bar Date Notice to be mailed no later than 3 days after
the later of (i) the date the Debtors file their Schedules with this Court or (ii) entry of the Bar Date
Order. Additionally, the Debtors will cause the Publication Notice to be published by a date that
is at least 21 days before the General Bar Date. Thus, by establishing the Bar Date pursuant to the
provisions hereof, all claimants will have at least 21 days’ actual or constructive notice of the Bar
Date for filing its proof of claim, thereby satisfying Bankruptcy Rule 2002(a)(7). Additionally,
because the Debtors expect to file their Schedules on or about July 8, 2024, known creditors will
have ample time to review the Schedules, reconcile the information contained therein with their
own books and records, and prepare and file proofs of claim, if necessary.
In addition, in the event the Debtors amend or supplement the Schedules subsequent
to the date on which the Debtors serve the Bar Date Notice, the Debtors shall give notice of any
amendment or supplement to the holders of affected claims whereby such holders will have no
less than 21 days from the notice date to file proofs of claim with respect to their claims. Moreover,
unless otherwise ordered by the Court, and in the event the Debtors reject an executory contract or
unexpired lease, holders of claims arising from such rejection, if any, shall file claims on account
of such rejection by the later of (i) the General Bar Date, (ii) 30 days after the later of (A) entry of
an order approving the rejection of any executory contract or unexpired lease of the Debtors or
Case 24-11217-BLS Doc 116 Filed 06/25/24 Page 18 of 21
19
(B) the effective date of a rejection of any executory contract or unexpired lease of the Debtors
pursuant to operation of any Court order.
The procedures and notice periods described herein afford creditors ample
opportunity to review the Schedules and file proofs of claim while, at the same time, ensuring that
the Debtors can achieve certainty with respect to its liabilities in a timely manner. In fact, the entry
of orders granting relief similar to that requested herein is routinely approved in large chapter 11
cases in this district. See, e.g., In re Express, Inc., No. 24-10831 (KBO) (Bankr. D. Del. May 20,
2024); In re Sientra, Inc., No. 24-10245 (JTD) (Bankr. D. Del. Mar. 26, 2024); In re MVK FarmCo
LLC, No. 23-11721 (LSS) (Bankr. D. Del. Nov. 15, 2023); In re Yellow Corp., No. 23-11069
(CTG) (Bankr. D. Del. Sept. 13, 2023); In re PGX Holdings, Inc., No. 23-10718 (CTG) (Bankr.
D. Del. Jun. 4, 2023); In re Destination Maternity Corp., No. 19-12256 (BLS) (Bankr. D. Del.
Dec. 10, 2019).
Accordingly, the Debtors submit that the Bar Dates and the form and manner of
providing notice thereof are appropriate in light of the circumstances, inure to the benefit of all
parties in interest, and should be approved.
Notice
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) counsel to the 1L Ad Hoc Group; (h) the agent of the DIP Facility and counsel thereto; (i) the
agent of the First Lien Credit Agreement and counsel thereto; (j) the Second Lien Credit
Agreement Agent and counsel thereto; (k) the agent of the First Lien Notes and counsel thereto;
Case 24-11217-BLS Doc 116 Filed 06/25/24 Page 19 of 21
20
(l) counsel to any statutory committee; and (m) 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.
Case 24-11217-BLS Doc 116 Filed 06/25/24 Page 20 of 21
WHEREFORE, the Debtors request entry of the Bar Date 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 25, 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. (admitted pro hac vice)
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. (admitted pro hac vice)
Warren A. Usatine, Esq (admitted pro hac vice)
Spencer A. Winters, P.C. (admitted pro hac vice)
Court Plaza North, 25 Main Street
Yusuf U. Salloum (admitted pro hac vice)
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 116 Filed 06/25/24 Page 21 of 21