Vyaire - COC - Bid Procedures Motion Order Final
- Date
- 2024-07-11
Summary
An order of the U.S. Bankruptcy Court for the District of Delaware, Doc 249 filed July 11, 2024 in In re Vyaire Medical, Inc., et al., Case No. 24-11217 (BLS), granting the debtors' motion at Docket No. 16 on bidding procedures for the sale of substantially all of their assets. The order approves the Bidding Procedures, the Sale Notice and the assumption and assignment procedures for contracts and leases. It authorizes the debtors to designate up to two Stalking Horse Bidders, with Bid Protections capped by a 3% break-up fee, an Expense Reimbursement of no more than $250,000 and $850,000 in the aggregate. It sets July 1, 2024 as the IOI deadline and provides notice terms for Cigna Health and Life Insurance Company. The 22-page order is signed by United States Bankruptcy Judge Brendan L. Shannon.
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Case 24-11217-BLS Doc 249 Filed 07/11/24 Page 1 of 22
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. 16
ORDER (I) APPROVING BIDDING PROCEDURES
IN CONNECTION WITH THE SALE OF SUBSTANTIALLY ALL
OF THE DEBTORS’ ASSETS, (II) AUTHORIZING THE DEBTORS
TO ENTER INTO A STALKING HORSE AGREEMENT AND
PROVIDE BID PROTECTIONS, (III) APPROVING THE FORM AND
MANNER OF NOTICE THEREOF, (IV) SCHEDULING AN AUCTION AND
SALE HEARING, (V) APPROVING PROCEDURES FOR THE ASSUMPTION
AND ASSIGNMENT OF CONTRACTS, (VI) APPROVING THE SALE OF THE
DEBTORS’ ASSETS FREE AND CLEAR, AND (VII) GRANTING RELATED RELIEF
Upon the Motion of the Debtors for Entry of an Order (I) Approving Bidding Procedures
in Connection with the Sale of Substantially All of the Debtors’ Assets, (II) Authorizing the Debtors
to Enter Into a Stalking Horse Agreement and Provide Bid Protections, (III) Approving the Form
and Manner of Notice Thereof, (IV) Scheduling an Auction and Sale Hearing, (V) Approving
Procedures for the Assumption and Assignment of Contracts, (VI) Approving the Sale of the
Debtors’ Assets Free and Clear, and (VII) Granting Related Relief [Docket No. 16]
(the “Motion”)2 filed by the debtors and debtors in possession (collectively, the “Debtors”) in
the above-captioned debtors chapter 11 cases (the “Chapter 11 Cases”); this Court having
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 defined herein shall have the respective meanings ascribed to such terms in the
Motion or in the Bidding Procedures, as applicable.
Case 24-11217-BLS Doc 249 Filed 07/11/24 Page 2 of 22
reviewed the Motion, the First Day Declaration, the Schlappig Declaration [Docket No. 158], the
Braley Declaration [Docket No. 157] and having considered the statements of counsel and the
evidence adduced with respect to the Motion at a hearing (if any) to consider certain of the relief
requested in the Motion (the “Bidding Procedures Hearing”); and after due deliberation, this Court
having determined that the legal and factual bases set forth in the Motion establish just cause for
the relief granted herein; and it appearing that the relief requested in the Motion is in the best
interests of the Debtors, their estates, and their creditors, and the Debtors having demonstrated good,
sufficient, and sound business justifications for the relief granted herein;
IT IS HEREBY FOUND AND DETERMINED THAT:3
A. 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 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 before this Court
pursuant to 28 U.S.C. §§ 1408 and 1409.
3 The findings and conclusions set forth herein constitute the Court’s findings of fact and conclusions of law pursuant
to Bankruptcy Rule 7052, made applicable to this proceeding pursuant to Bankruptcy Rule 9014. To the extent
any of the following findings of fact constitute conclusions of law, they are adopted as such. To the extent any
of the following conclusions of law constitute findings of fact, they are adopted as such.
2
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B. Statutory and Legal Predicates. The statutory and legal predicates for the
relief requested in the Motion are sections 105(a), 363, 365, 503, and 507 of the Bankruptcy Code,
Bankruptcy Rules 2002, 6004, 6006, 9007, 9008, and 9014, and Local Rules 2002-1, 6004-1, and
9006-1.
C. Good and sufficient notice of the Motion, the Bidding Procedures, and the
relief sought in the Motion has been given under the circumstances, and no other or further notice
is required except as set forth herein. A reasonable opportunity to object or be heard regarding the
relief provided herein has been afforded to parties in interest.
D. Bidding Procedures. The Debtors have articulated good and sufficient
business reasons for the Court to approve the bidding procedures attached hereto as Exhibit 1
(the “Bidding Procedures”). The Bidding Procedures are fair, reasonable, and appropriate and
are designed to maximize the value of the proceeds of one or more sales (each, a “Sale Transaction”)
of some, all, or substantially all of the Debtors’ assets (the “Assets”). The Bidding Procedures
were negotiated in good faith and at arm’s length and are reasonably designed to promote a
competitive and robust bidding process to generate the greatest level of interest in the Debtors’
Assets. The proposed process for potentially designating a Stalking Horse Bidder or Bidders was
fair and appropriate under the circumstances and in the best interests of the Debtors’ estates. The
Bidding Procedures comply with the requirements of Local Rule 6004-1(c).
E. The Debtors have demonstrated a compelling and sound business
justification for the Court to enter this Order and thereby: (a) approve the Bidding Procedures in
connection with the sale of some or substantially all of the Assets, (b) approve the form and manner
of notice thereof as described in paragraph 7 herein (including the Sale Notice), (c) schedule an
Auction and Sale Hearing, (d) approve procedures for the assumption and assignment of contracts
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Case 24-11217-BLS Doc 249 Filed 07/11/24 Page 4 of 22
and leases, and (e) grant related relief as set forth herein. Such compelling and sound business
justification, which was set forth in the Motion, the Schlappig Declaration, the Braley Declaration,
and the First Day Declaration, are incorporated herein by reference and, among other things, form
the basis for the findings of fact and conclusions of law set forth herein.
F. Sale Notice. The sale notice, the form of which is attached as Exhibit 2
(the “Sale Notice”), is appropriate and reasonably calculated to provide all interested parties with
timely and proper notice of the Auction, the Sale Hearing (as defined in the Bidding Procedures),
the Bidding Procedures, the Sale Transaction(s), and all relevant and important dates and objection
deadlines with respect to the foregoing, and no other or further notice of the Sale Hearing, the Sale
Transaction(s), or the Auction shall be required.
G. Assumption and Assignment Provisions. The Debtors have articulated
good and sufficient business reasons for the Court to approve the assumption and assignment
procedures set forth herein, in the Bidding Procedures (the “Assumption and Assignment
Procedures”) and the Potentially Assumed and Assigned Contracts Notice attached hereto as
Exhibit 3 (the “Potentially Assumed and Assigned Contracts Notice”), which are fair,
reasonable, and appropriate. The Assumption and Assignment Procedures comply with the
provisions of section 365 of the Bankruptcy Code and Bankruptcy Rule 6006.
H. Potentially Assumed and Assigned Contracts Notice. The Potentially
Assumed and Assigned Contracts Notice, the form of which is attached hereto as Exhibit 3, is
appropriate and reasonably calculated to provide all interested parties with timely and proper notice
of the Assumption and Assignment Procedures, as well as any and all objection deadlines related
thereto, and no other or further notice shall be required for the Motion and the procedures described
therein, except as expressly required herein.
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I. The Successful Bidder Notice, substantially in the form attached hereto as
Exhibit 4, is reasonably calculated to provide interested parties with timely and proper notice of
the proposed Sale Transaction(s), including, without limitation: (a) the Successful Bidder, (b) the
Back-Up Bidder, if applicable, (c) the proposed Bid Protections provided to the Successful Bidder,
if any, (d) the key terms of the proposed Sale Transaction(s), and (e) the date, time, and place of
the Sale Hearing.
J. Notice. Notice of the Motion, the proposed Bidding Procedures, the
proposed process for designation of a Stalking Horse Bidder or Bidders, and the Bidding
Procedures Hearing was (i) appropriate and reasonably calculated to provide all interested parties
with timely and proper notice, (ii) in compliance with all applicable requirements of the Bankruptcy
Code, the Bankruptcy Rules, and the Local Rules and (iii) adequate and sufficient under the
circumstances of the Debtors’ Chapter 11 Cases, such that no other or further notice need be
provided except as set forth in the Bidding Procedures and the Assumption and Assignment
Procedures. A reasonable opportunity to object and be heard regarding the relief granted herein
has been afforded to all parties in interest.
K. The legal and factual bases set forth in the Motion establish just cause for
the relief granted herein. Entry of this Order is in the best interests of the Debtors and their estates,
creditors, interest holders, and all other parties in interest.
L. The Bidding Procedures comply with the requirements set forth by Local
Rule 6004-(1)(c).
5
Case 24-11217-BLS Doc 249 Filed 07/11/24 Page 6 of 22
IT IS HEREBY ORDERED THAT:
1. The Motion is GRANTED as set forth herein.
2. All objections to the relief granted in this order (the “Order”) that have not
been withdrawn, waived, or settled, and all reservations of rights included therein are hereby
overruled and denied on the merits with prejudice.
3. Potential Stalking Horse Bidder Designation. Pursuant to the Bidding
Procedures, the Debtors are authorized, subject to the consent of the Required DIP Lenders
(as defined in the DIP Order, and which consent shall not be unreasonably withheld), and in
consultation with the official committee of unsecured creditors (the “Committee”), but not directed
to, select one or more Qualified Bidders that submit a Qualified Bid for all or any portion of the
Assets to act as a Stalking Horse Bidder and enter into a Stalking Horse APA with each such
Stalking Horse Bidder no later than July 11, 2024. Subject to the consent of the Required DIP
Lenders (which consent shall not be unreasonably withheld), and in consultation with the
Committee, the Debtors are further authorized, but not directed, to offer the Bid Protections to
such Stalking Horse Bidder(s) provided that the total Bid Protections offered to each Stalking
Horse Bidder shall not exceed the greater of: (a) a break-up fee (a “Break-Up Fee”) of
three percent (3%) of the total cash consideration payable under such Stalking Horse APA, if any,
which Break-Up Fee would be inclusive of any expenses incurred by such Stalking Horse Bidder,
and (b) a Break-Up Fee of three percent (3%) of the total cash consideration payable under such
Stalking Horse APA, if any, plus reasonable and documented expenses (an “Expense
Reimbursement,” and together with any Break-Up Fee, the “Bid Protections”), which Expense
Reimbursement shall be no greater than $250,000; provided that, the sum of the Break-Up Fee and
the Expense Reimbursement in this clause (b) shall not exceed $850,000 in the aggregate; provided
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further, that any and all Bid Protections shall be subject to the objection process in paragraph 4
below; provided further, that the Debtors shall be entitled to offer Bid Protections to no more than
two (2) Stalking Horse Bidders. The Stalking Horse Bid and Stalking Horse APA, if any, shall be
subject to higher or otherwise better offers consistent with the Bidding Procedures, and no Bid
Protections shall be offered on account of any portion of the purchase price of such Stalking Horse
Bid that is a credit bid, assumption of liabilities, or non-cash (or cash-equivalent) consideration.
Further, no Bid Protections shall be provided to an insider or an affiliate of the Debtors.
4. If the Debtors, consistent with the Bidding Procedures and subject to the
consent of the Required DIP Lenders (which consent shall not be unreasonably withheld), and in
consultation with the Committee, determine to offer Bid Protections to any Stalking Horse Bidder,
the Debtors shall file with the Court and serve a notice (a “Stalking Horse Notice”) seeking
approval of the designation and the Bid Protections which shall include: (a) the identity of the
Stalking Horse Bidder; (b) the amount of the Stalking Horse Bid; (c) a copy of the Stalking Horse
APA; (d) the proposed Bid Protections to be provided to the Stalking Horse Bidder; and
(e) a declaration in support of the proposed Bid Protections, which includes whether the Stalking
Horse Bidder has any connection with the Debtors other than that which arises from the Stalking
Horse Bid. For the avoidance of doubt, nothing in this Order is shifting the Debtors’ burden of
proof that the Bid Protections are actually necessary to preserve the value of the estates pursuant
to section 503(b) of the Bankruptcy Code. Nothing in this Order shall be deemed to award any
Bid Protections (i) related to a credit bid or (ii) in favor of an insider of or affiliate of the Debtors.
Any objection to (i) the Bid Protections set forth in a Stalking Horse Notice or (ii) the designation
of the Stalking Horse (a “Stalking Horse Objection”), shall be filed no later than four (4) business
days after the filing of the Stalking Horse Notice at 4:00 p.m. (prevailing Eastern Time). If
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a timely Stalking Horse Objection is filed, the Debtors are authorized to seek an expedited hearing
with respect to the Stalking Horse Objection on not less than three (3) calendar days’ notice.
Absent any timely Stalking Horse Objection, the Court may enter an order approving the Bid
Protections set forth in the Stalking Horse Notice and the designation of the Stalking Horse.
5. IOI Deadline. July 1, 2024, at 4:00 p.m. (prevailing Eastern Time) is
the deadline by which all IOIs for a Sale Transaction must be submitted in accordance with the
terms of the Bidding Procedures. The Debtors may extend such deadline in accordance with the
Bidding Procedures subject to the consent of the Required DIP Lenders (which consent shall not
be unreasonably withheld) and without any further motion in this Court; provided that the Debtors
shall file a notice with the Court if the Debtors decide to extend the deadline by which IOIs for a
Sale Transaction must be submitted; provided further that if no IOIs (individually or in the
aggregate), in the good faith estimate of the Debtors and their advisors, with the consent of the
Required DIP Lenders , are likely to lead to Bids that (individually or in the aggregate) meet the
Minimum Bid Requirement as set forth in the Bidding Procedures and herein, then the Debtors
shall terminate the sale process and cancel the Auction.
6. Bid Deadline. July 22, 2024, at 5:00 p.m. (prevailing Eastern Time) is
the deadline by which all Bids for a Sale Transaction (as well as the Good Faith Deposit and other
documentation required under the Bidding Procedures for a Bid to be considered a Qualified Bid)
must be submitted in accordance with the terms of the Bidding Procedures. For the avoidance of
doubt, a Bid or series of Bids shall not constitute a “Qualified Bid” unless such Bid(s) (a) meets
the Minimum Bid Requirement and (b) contemplates that the aggregate cash sale proceeds of such
Bid(s) shall be indefeasibly paid to the DIP Lenders immediately upon the closing of the Sale
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Transaction(s) subject to deductions for wind-down costs and expenses described in section D.4.4
of the Bidding Procedures (such deducted amounts which shall be paid to the Debtors). The
Debtors may extend such deadline in accordance with the Bidding Procedures subject to the
consent of the Required DIP Lenders (which consent shall not be unreasonably withheld) and
without any further motion in this Court; provided that the Debtors shall file a notice with the
Court if the Debtors decide, with the consent of the Required DIP Lenders (which consent shall
not be unreasonably withheld), to extend the deadline by which Bids for a Sale Transaction must
be submitted; provided further that if no Bids, individually or in the aggregate, meet the Minimum
Bid Requirement as set forth in the Bidding Procedures and herein, then the Debtors shall terminate
the sale process and cancel the Auction.
7. Minimum Bid Requirement. Each Bid for all or substantially all of the
Debtors’ Assets must consist of or include cash consideration to be paid at the closing of the
transactions, which such amount would be payable to the DIP Lenders, contemplated by the
Modified APA in an amount equal to at least an amount that would satisfy the Minimum Bid
Requirement (as defined below); provided, however, that any Bid for less than substantially all of
the Debtors’ Assets will not be subject to any minimum bid amount threshold. Each Bid must set
forth the total purchase price for such Bid. Notwithstanding the foregoing and as further described
in the Bidding Procedures, if the aggregate cash consideration for the Debtors’ Assets, whether
consisting of one Bid or a series of Bids for some, all, or substantially all of the Debtors’ Assets
4 For the avoidance of doubt, payment of the aggregate cash sale proceeds to the DIP Lenders shall be subject to
the Committee’s challenge rights set forth in paragraph 12 of the Final Order (I) Authorizing the Debtors to Obtain
Postpetition Financing, (II) Authorizing the Debtors to Use Cash Collateral, (III) Granting Liens and Providing
Superpriority Administrative Expense Claims, (IV) Granting Adequate Protection, (V) Modifying Automatic
Stay, and (VI) Granting Related Relief (the “Final DIP Order”).
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that would be payable to the DIP Lenders does not meet or exceed $140,000,000 (the “Minimum
Bid Requirement”), then the Debtors shall terminate the sale process and cancel the Auction.
8. Credit Bidding. Nothing in this Order shall impact or limit the rights of
the Prepetition Agents, DIP Lenders, and DIP Agent, pursuant to section 363(k) of the Bankruptcy
Code, to credit bid all or any portion of the Obligations, under (and as defined in) each of the
Prepetition Credit Agreements and the DIP Credit Agreement, as applicable, to acquire the Assets
(each dollar of such obligations that is credit bid shall be treated the same as a dollar of cash);
provided that the DIP Lenders, Prepetition Lenders, Prepetition Agents, and the DIP Agent agree,
solely in the event that the Company receives a Bid or series of Bids by the Bid Deadline that is
not less than the Minimum Bid Requirement, then the DIP Lenders and the DIP Agent shall not
credit bid for the Assets. Notwithstanding anything to the contrary herein, nothing in these Bidding
Procedures shall be considered as a waiver of any other party in interest to object to, or seek to
limit, the Credit Bid during the Challenge Period under section 363(k) of the Bankruptcy Code;
provided, however, that this reservation of rights is not intended to, and does not, expand or limit
the Challenge Period or the Challenge rights provided for under the DIP Order.
9. Auction. If at least two Qualified Bids (including any Bid by a Stalking
Horse Bidder) are received by the Bid Deadline with regard to any particular Asset when combined
with any other Qualified Bids that, in the aggregate, meet the Minimum Bid Requirement, the
Debtors will conduct an auction no later than July 24, 2024, at 10:00 a.m. (prevailing Eastern
Time) in person at the office of Kirkland & Ellis LLP, 333 West Wolf Point Plaza, Chicago, IL
60654 and/or via remote video at the Debtors’ election (the “Auction Date”). If held, the Auction
proceedings will be transcribed. In the event the Debtors determine an Auction shall be held, the
Debtors shall file notice on the docket and send written notice (email sufficient) of the date, time,
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and place of the Auction to the Qualified Bidders no later than one (1) business day before such
Auction, and will post notice of the date, time, and place of the Auction no later than one (1)
business day before such Auction on their restructuring website,
www.omniagentsolutions.com/Vyaire (the “Case Website”). Only the following parties, and their
respective professionals and principals, and their respective representatives and counsel, may
attend the Auction: (i) the Debtors, (ii) the United States Trustee, (iii) advisors to the Committee,
(iv) any Qualified Bidder, (v) advisors to the DIP Lenders, (vi) any creditors that request access to
the Auction within 48 hours prior to the date of the Auction, and (vii) any other parties that the
Debtors deem appropriate. Notwithstanding the foregoing, if no Qualified Bids, individually or in
the aggregate, meet the Minimum Bid Requirement, then the Debtors shall terminate the sale
process and cancel the Auction. For the avoidance of doubt, a Bid or series of Bids shall not
constitute a “Qualified Bid” unless such Bid(s) (a) meets the Minimum Bid Requirement and
(b) contemplates that the aggregate cash sale proceeds of such Bid(s) shall be indefeasibly paid to
the DIP Lenders immediately upon the closing of the Sale Transaction(s) subject to deductions for
wind-down costs and expenses required to be paid pursuant to the DIP Orders and the RSA (which
such deducted amounts shall be paid to the Debtors).5
10. Each Qualified Bidder participating in the Auction will be required to
confirm in writing and on the record at the Auction that (a) it has not engaged in any collusion
with respect to the bidding or sale of any of the Debtors’ Assets or otherwise taken any other action
to prevent a transparent and competitive auction process, and (b) its Qualified Bid is a good faith
5 For the avoidance of doubt, payment of the aggregate cash sale proceeds to the DIP Lenders shall be subject to
the Committee’s challenge rights set forth in paragraph 12 of the Final DIP Order.
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bona fide offer that it intends to consummate if selected as the Successful Bidder or Back-Up
Bidder.
11. Following the Auction, the Debtors will determine, with the consent of the
Required DIP Lenders, which Qualified Bid is the highest or otherwise best Bid(s) for the Assets
or subsets thereof. No later than July 24, 2024, at 4:00 p.m. (prevailing Eastern Time), or as
soon as reasonably practicable following the Auction, the Debtors will serve the Successful Bidder
Notice, substantially in the form attached hereto as Exhibit 4, or notice of cancellation, as
applicable, (a) by overnight delivery service upon the applicable contract or lease counterparties
(the “Contract Counterparties”) at the address set forth in the notice provision of the applicable
contract (and their counsel, if known) and (b) by first class mail, email, or fax upon the Notice
Parties (as defined below). The Debtors shall file the Successful Bidder Notice or notice of
cancellation, as applicable, and the final form of proposed order approving the Sale Transaction.
12. Good Faith Deposits. The Debtors may open one or more escrow accounts
to hold the Good Faith Deposits of all Qualified Bidders. The Debtors shall hold and return the
Good Faith Deposits of Qualified Bidders in accordance with the Bidding Procedures. If a
Successful Bidder (or if the Sale Transaction is to be consummated with the applicable Back-Up
Bidder, then such Back-Up Bidder) fails to consummate the Sale Transaction because of a breach
or failure to perform on the part of such Bidder, then the Debtors and their estates shall be entitled
to retain the Good Faith Deposit of such Successful Bidder (or, if the Sale Transaction is to be
consummated with a Back-Up Bidder, then such Back-Up Bidder) as part of the damages resulting
to the Debtors and their estates for such breach or failure to perform. Any such forfeited Good
Faith Deposit shall become property of the Debtors’ estates, shall be considered proceeds of the
Assets, and shall be subject to the liens of the Debtors’ DIP Lenders and Prepetition Secured
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Parties (as defined in the DIP Order), in accordance with the lien priorities set forth in the DIP
Orders.
13. Sale Transaction Objections. All general objections to the Sale
Transaction, if any, must (a) be in writing, (b) state, with specificity, the legal and factual bases
thereof, (c) be filed with the Court and served so as to be actually received by no later than July 22,
2024, at 4:00 p.m. (prevailing Eastern Time) on the following parties (collectively, the “Notice
Parties”): (i) the Debtors, 6125 North Riverwoods Boulevard, Mettawa, Illinois 60045;
(ii) proposed co-counsel for the Debtors, Kirkland & Ellis LLP, 601 Lexington Avenue, New
York, New York 10022, (Attn.: Joshua A. Sussberg, P.C. (joshua.sussberg@kirkland.com) and
Chris Ceresa (chris.ceresa@kirkland.com)); and Kirkland & Ellis LLP, 333 West Wolf Point
Plaza, Chicago, Illinois 60654, (Attn.: Spencer A. Winters, P.C. (spencer.winters@kirkland.com),
Yusuf U. Salloum (yusuf.salloum@kirkland.com), and Rebecca Marston
(rebecca.marston@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), and Jack M. Dougherty, Esq. (jdougherty@coleschotz.com), and
Court Plaza North, 25 Main Street, Hackensack, New Jersey 07601, (Attn.: Michael D. Sirota, Esq.
(msirota@coleschotz.com)); (iii) co-counsel to the DIP Lenders, 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 Pachulski
Stang Ziehl & Jones LLP, 919 North Market Street, 17th Floor, Wilmington, DE 19801
(Attn: Laura Davis Jones (ljones@pszjlaw.com)); (iv) proposed counsel to the Committee,
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McDermott Will & Emery LLP, One Vanderbilt Avenue, New York, NY 10017-3852,
Attn: Darren Azman (dazman@mwe.com) and Kristin Going (kgoing@mwe.com) and
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); (v) the Office of the United States Trustee, 844 King Street, Suite 2207,
Lockbox 35, Wilmington, Delaware 19801, Attn.: Benjamin A. Hackman
(Benjamin.A.Hackman@usdoj.gov); and (vi) any other party that has requested notice pursuant to
Bankruptcy Rule 2002.
14. Following service of the Successful Bidder Notice, parties may object to the
conduct of the Auction, the particular terms of any proposed Sale Transaction in a Successful Bid,
or the identity of the Successful Bidder(s) or Back-Up Bidder(s) (each such objection, a “Post-
Auction Objection”). Any Post-Auction Objection must (a) be in writing, (b) state, with
specificity, the legal and factual bases thereof, and (c) be filed with the Court and served so as to
be actually received by no later than July 25, 2024, at 4:00 p.m., (prevailing Eastern Time) on
the Notice Parties.
15. Following service of the Successful Bidder Notice, parties may object to the
adequate assurance of future performance of the applicable Successful Bidder or Back-Up Bidder
(each such objection, an “Adequate Assurance Objection”). Any Adequate Assurance Objection
must (a) be in writing, (b) state, with specificity, the legal and factual bases thereof, and (c) be
filed with the Court and served so as to be actually received by no later than July 29, 2024 at 4:00
p.m. (prevailing Eastern Time) on the Notice Parties; provided that, to the extent not
consensually resolved, any Adequate Assurance Objection may be set for hearing at a date and
time following the Sale Hearing.
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I. Auction, Bidding Procedures, and Related Relief.
16. The Bidding Procedures, substantially in the form attached hereto as
Exhibit 1, are incorporated herein and are hereby approved in their entirety. The Bidding
Procedures shall govern the submission, receipt, and analysis of all Bids relating to any Sale
Transaction. Any party desiring to submit a Bid shall comply with the Bidding Procedures and
this Order. The Debtors are authorized to take any and all actions necessary to implement the
Bidding Procedures and the Debtors and their professionals shall direct and preside over the
Auction.
17. Noticing Procedures. The noticing procedures as set forth in this Order
and the Motion, including the Sale Notice attached hereto as Exhibit 2, are hereby approved.
Within two (2) business days after entry of this Order, or as soon as reasonably practicable
thereafter, the Debtors shall serve the Sale Notice by first-class mail upon the parties that received
notice of the Motion. On or about the same date, the Debtors will publish the Sale Notice on the
Debtors’ Case Website and will also publish a notice substantially similar to the Sale Notice in
The New York Times (national edition) (the “Publication Notice”). Service of the Sale Notice and
publication thereof in the manner described in this Order constitutes good and sufficient notice of
the Auction and the Sale Hearing. No other or further notice is required.
18. Cancellation of Auction. If only one Qualified Bid that meets the
Minimum Bid Requirement (including any Stalking Horse Bid) or no Qualified Bid that meets the
Minimum Bid Requirement (or Bid that may be remedied into a Qualified Bid pursuant to the
Bidding Procedures and is actually remedied into a Qualified Bid that meets the Minimum Bid
Requirement prior to the Auction) is received by the Bid Deadline, the Debtors shall (a) notify the
Court in writing that the Auction is cancelled, (b) file a notice of cancellation of the Auction, and
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(c) if applicable, seek authority at the Sale Hearing to consummate the Sale Transaction with the
Qualified Bidder (including any Stalking Horse Bidder). The Debtors may also cancel the Auction
if they determine, with the written consent of the Required DIP Lenders, to implement the Sale
Transaction through a chapter 11 plan of reorganization in advance of the Bid Deadline. For the
avoidance of doubt and notwithstanding anything else herein or in the Bidding Procedures, if there
are no Qualified Bids that, individually or in the aggregate, meet the Minimum Bid Requirement,
the Debtors shall terminate the sale process and cancel the Auction. For the avoidance of doubt, a
Bid or series of Bids shall not constitute a “Qualified Bid” unless such Bid(s) (a) meets the
Minimum Bid Requirement and (b) contemplates that the aggregate cash sale proceeds of such
Bid(s) shall be indefeasibly paid to the DIP Lenders immediately upon the closing of the Sale
Transaction(s) subject to deductions for wind-down costs and expenses required to be paid
pursuant to the DIP Orders and the RSA (which such deducted amounts shall be paid to the
Debtors).
19. Sale Hearing. The Sale Hearing shall be held in the United States
Bankruptcy Court for the District of Delaware, 824 North Market Street, 6th Floor, Courtroom
No. 1, Wilmington, Delaware 19801, on July 31, 2024, at 2:00 p.m. (prevailing Eastern Time)
or such other date and time that the Court may later direct; provided that the Sale Hearing may be
adjourned, from time to time, in accordance with the Bidding Procedures without further notice to
creditors or parties in interest other than by filing a notice on the Court’s docket or indicating such
adjournment in an agenda filed on the Court’s docket.
II. Approval of the Assumption and Assignment Procedures.
20. The assumption and assignment procedures as set forth in this Order and
the Motion, including the Potentially Assumed and Assigned Contracts Notice and Successful
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Bidder Notice attached hereto as Exhibit 3 and Exhibit 4, are hereby approved. No later than
two (2) business days (or as soon as reasonably practicable thereafter) after the entry of this Order,
the Debtors shall file an Potentially Assumed and Assigned Contracts Notice, substantially in the
form attached hereto as Exhibit 3, and serve such notice (a) by overnight delivery service upon
the applicable Contract Counterparties at the address set forth in the notice provision of the
applicable contract or lease (and their counsel, if known) and (b) by first class mail, email, or fax
upon the Notice Parties. The Potentially Assumed and Assigned Contracts Notice shall notify the
Contract Counterparties that the applicable executory contracts and unexpired leases are subject
to potential assumption and assignment and of the Debtors’ proposed cure amounts relating to such
executory contracts and unexpired leases.
21. Following the Bid Deadline, upon request by any Contract Counterparty,
the Debtors will send such party evidence by first class mail and email (if known), that any
Qualified Bidder that included such contract or lease in its Bid has the ability to perform thereunder
and otherwise complies with the requirements of adequate assurance of future performance under
section 365(b)(1) of the Bankruptcy Code on a confidential basis for all nonpublic information.
Notwithstanding the foregoing, the rights of the U.S. Trustee and any domestic governmental unit
(as defined in 11 U.S.C. § 101(27)) to object to the terms of any proposed sale order or purchase
agreement shall be preserved for a period of at least four (4) business days of the filing of such
document; provided that, in the event any revised version of such document is filed, such
4˗business˗day period shall relate back to the date when the initial version of such document, as
applicable, was filed, except to the extent the revisions or modifications reflected in such revised
version may materially affect the interests of the U.S. Trustee or any domestic governmental unit,
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as applicable, in which case, the 4˗business˗day period shall be preserved for such party as to such
revisions or modifications based on when such revised version was filed.
22. A Contract Counterparty objecting to a proposed cure amount or
assumption and assignment on any basis (except objections solely related to adequate assurance
of future performance by Successful Bidder) must file a written objection with the Court by
fourteen (14) days after serving the applicable Potentially Assumed and Assigned Contracts
Notice, and serve such objection on the Notice Parties (such deadline, the “Assumption and
Assignment Objection Deadline”). The Debtors shall file on the docket in these chapter 11 cases
copies of the Successful Bidder Notice or notice of cancellation, as applicable, and the final form
of proposed order approving the Sale Transaction as agreed upon between the Debtors and the
Successful Bidder.
23. In the event that the Debtors later identify any Contract Counterparty which
was not served with the Potentially Assumed and Assigned Contracts Notice, the Debtors may
subsequently serve such Contract Counterparty with a Potentially Assumed and Assigned Contract
substantially in the form attached hereto (each, a “Supplemental Potentially Assumed and
Assigned Contracts Notice”), and the Assumption and Assignment Procedures will nevertheless
apply to such Contract Counterparty; provided that the Assumption and Assignment Objection
Deadline with respect to a Contract Counterparty listed on a Supplemental Potentially Assumed
and Assigned Contracts Notice shall be fourteen (14) days following the date of service of a
Supplemental Potentially Assumed and Assigned Contracts Notice.
24. If an objection to the Debtors’ proposed cure amounts is timely filed and
not withdrawn or resolved by the Sale Hearing, such cure objections will not be heard at the Sale
Hearing. Any dispute regarding the cure amounts will either be resolved consensually, if possible,
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or, if the parties are unable to resolve, at a later date as set by the Court. The Debtors shall file and
serve a notice for a hearing for the Court to consider the unresolved cure objection(s) at the next
scheduled omnibus hearing which shall be set fourteen (14) days after the Sale Hearing, subject to
Court availability, unless the Debtors and the objecting parties agree to a different time and subject
to the Court’s schedule. The Debtors reserve the right to reject, and not assume and assign, any
contract depending on the ultimate resolution of any cure amount in dispute; provided that, in the
case of an unexpired lease of non-residential real property, such determination shall be prior to the
expiration of the applicable deadline to assume or reject unexpired leases under section 365(d)(4)
of the Bankruptcy Code. For the avoidance of doubt, if the Successful Bidder determines, in its
sole discretion, that the cure dispute is too material, the Successful Bidder may delay the
assignment of such contract or lease until the resolution of the cure amount; provided that, in such
case, if any, the Successful Bidder shall be responsible for any and all costs arising under such
contract or lease during the pendency of the dispute.
25. If no objection to the assumption of any contract or lease is timely filed or
if an objection is filed and resolved, each contract or lease to be assumed and assigned to the
Successful Bidder shall be assumed as of the effective date of the assumption and assignment of
the contract or lease (the “Assignment Date”) set forth in the applicable Successful Bidder Notice
or such other date as the Debtors and the Contract Counterparty agree and the proposed cure
amount shall be binding on all Contract Counterparties and the Contract Counterparties will be
forever barred from asserting any other claims related to the contract or lease against the Debtors.
Upon the Assignment Date, the Successful Bidder shall pay all applicable cure amounts.
26. As soon as reasonably practicable after the closing of a Sale Transaction,
the Debtors will file with the Court, serve on the applicable Contract Counterparties and cause to
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be published on the Case Website, a notice containing the list of contracts and leases that the
Debtors assumed and assigned pursuant to any asset purchase agreement with a Successful Bidder.
27. The inclusion of a contract on the Successful Bidder Notice shall not:
(a) obligate the Debtors to assume or assign any contracts or leases listed thereon; or (b) constitute
any admission or agreement of the Debtors that such contract or lease is an executory contract.
Only those contracts and leases that are included on a schedule of assumed and acquired contracts
and leases attached to a final asset purchase agreement will be assumed and assigned, and shall
only be assumed and assigned upon the Assignment Date.
28. In the event the Auction is cancelled pursuant to the Bidding Procedures,
the Debtors may continue to utilize the assumption and assignment procedures as set forth in this
Order and the Motion to further assess the potential assumption, assumption and assignment, or
rejection of any executory contracts and unexpired leases and to determine any applicable cure
amounts.
III. Miscellaneous.
29. The failure to include or reference a particular provision of the Bidding
Procedures, the RSA, and the DIP Orders, specifically in this Order shall not diminish or impair
the effectiveness or enforceability of such a provision.
30. All parties in interest reserve any right they may have to object to, or
otherwise contest, any proposed sale of the Debtors’ assets requiring Court approval (and the
appropriate allocation of sale proceeds set forth in any order).
31. In the event of any inconsistencies between this Order and the Motion
and/or the Bidding Procedures, this Order shall govern in all respects.
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32. 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 such notice
satisfies the applicable Local Rules.
33. To the extent the dates and deadlines herein are modified pursuant to the
Bidding Procedures and such modification is inconsistent with the requirements of Local
Rule 9006-1, such requirements shall be deemed satisfied.
34. 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 agreements, 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 Orders and any
action taken or proposed to be taken hereunder, the terms of the DIP Orders shall control, and to
the extent there is any inconsistency between the terms of the RSA and any action taken or
proposed to be taken hereunder, the terms of this Order shall control. Nothing in the Motion or
this Order waives or modifies the requirements of the RSA, including without limitation, any
milestone or consent and consultation rights contained in the RSA or DIP Documents (as defined
in the DIP Orders).
35. The Debtors and Cigna Health and Life Insurance Company (“Cigna”) are
parties to an Administrative Services Contract and a Stop Loss Policy that facilitate the Debtors’
self-funded employee healthcare benefits (jointly, the “Cigna Employee Benefits Agreements”).
Notwithstanding anything in this Order to the contrary, for any Sale Transaction, unless Cigna and
the Debtors agree otherwise, the Debtors shall provide to Cigna, through its counsel (email
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sufficient), no later than (a) in the event there is no Auction, two (2) business days prior to the Sale
Hearing, or (b) in the event the Auction goes forward, not later than noon, one (1) business day
prior to the Sale Hearing, written notice of Debtors’ irrevocable (subject to closing of the
applicable Sale Transaction) decision as to whether or not the Debtors propose to assume and
assign the Cigna Employee Benefits Agreements to the applicable Successful Bidder(s) as part of
the applicable proposed Sale Transaction.
36. Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of this
Order are immediately effective and enforceable upon its entry.
37. The Debtors are authorized to take all actions necessary to effectuate the
relief granted in this Order in accordance with the Motion.
38. This Court retains jurisdiction with respect to all matters arising from or
related to the implementation, interpretation, and enforcement of this Order. This Court has the
authority to fashion appropriate relief, on an emergency basis or otherwise, for any violations of
this Order or the Bidding Procedures.
Dated: July 11th, 2024 BRENDAN L. SHANNON
Wilmington, Delaware UNITED STATES BANKRUPTCY JUDGE
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