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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re:
) Chapter 11
)
VYAIRE MEDICAL, INC., et al.,
) Case No. 24-11217 (BLS)
)
Debtors. ) Jointly Administered
)
) Related to Docket No. 256
)
) Obj. Deadline: 7/25/24 at 4:00 p.m. EST
) Hearing Date: TBD
OBJECTION OF AIRGAS THERAPEUTICS, LLC TO DEBTORS’ FIRST NOTICE
TO CONTRACT PARTIES OF POTENTIALLY ASSUMED AND ASSIGNED
EXECUTORY CONTRACTS AND UNEXPIRED LEASES
Airgas Therapeutics, LLC (“Airgas”), by and through its undersigned counsel, hereby
files this objection (the “Objection”) to the First Notice to Contract Parties of Potentially
Assumed and Assigned Executory Contracts and Unexpired Leases (Docket No. 256) (the
“Assumption Notice”) filed by the above-captioned debtors and debtors-in-possession
(collectively, the “Debtors”), and in support thereof, respectfully represents as follows:
BACKGROUND
1.
On June 9, 2024 (the “Petition Date”), each of the Debtors filed voluntary
petitions for relief under chapter 11 of title 11 of the United States Code (“Bankruptcy Code”).
2.
Prior to the Petition Date, in late 2017, a predecessor of Airgas, Scott Medical
Products, a division of Airgas USA, LLC, entered into an Agreement for Supply of Cylinder
Products and Related Equipment (the “Agreement”) with one of the Debtors, Vyaire Medical,
Inc., pursuant to which Airgas1 supplies certain gases to the Debtors. In addition, pursuant to the
1 Effective on January 1, 2022, Scott Medical Products merged into Airgas.
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Agreement, Airgas leases to the Debtors certain cylinders, pallets, and other items of equipment.
As of the Petition Date, the Agreement (including all amendments thereto) is an “executory
contract” as that term is used throughout the Bankruptcy Code, as both Airgas and the Debtors
have ongoing obligations to one another under the Agreement.
3.
On or about July 11, 2024, the Debtors filed the Assumption Notice, in which the
Debtors state that they may be assuming and assigning the Agreement to the highest and best
bidder in connection with the sale of the Debtors’ assets (the “Proposed Assignee”). To date, the
Debtors have not identified the Proposed Assignee. The Assumption Notice also states that the
cure amount to cure all defaults under the Agreement as of July 11, 2024 is $0 (the “Proposed
Cure Amount”).
OBJECTION AND BASIS THEREFOR
4.
The Proposed Cure Amount is incorrect according to Airgas’s books and records.
The correct amount that the Debtors owe to Airgas under the Agreement as of the date hereof is
actually $42,581.58.2
5.
In addition, it is impossible to state with certainty now as to what the ultimate
cure amount will be regarding the assumption and assignment of the Agreement since we do not
know as of the date hereof when closing of the sale of the Debtors’ assets might occur, and when
the Agreement might be assumed and assigned to the Proposed Assignee. Additional amounts
may become due by the time the sale of the Debtors’ assets actually closes. In addition, under
the Agreement, Airgas may be entitled to certain interest rates on unpaid amounts, as well as
certain attorneys’ fees and costs. These amounts are currently unliquidated because as of the
2 This amount only includes amounts owed to Airgas (Airgas Therapeutics, LLC) under the Agreement and does not
include any other amounts that may be owed by the Debtors to any affiliates of Airgas, or under any contracts other
than the Agreement.
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date hereof, Airgas cannot be certain as to when the actual effective date for the assumption and
assignment of the Agreement will occur. The actual cure amount for the Agreement should
include the $42,581.58 identified above, as well as all of the interest and attorneys’ fees and
costs to which Airgas is entitled under the Agreement, through the actual effective date of
assumption and assignment of the Agreement (the “Actual Cure Amount”).
6.
Additionally, the Agreement provides that the Debtors must indemnify and hold
Airgas harmless with respect to any damages that arise out of, result from, or are attributable to
any negligence of the Debtors. Airgas’s claims related to the Debtors’ indemnification
obligations may not become known until after the assumption and assignment of the Agreement.
Accordingly, any order approving the assumption and assignment of the Agreement must
provide that the assumption and assignment is pursuant to the terms of the Agreement, and that
the Proposed Assignee will be responsible for all of the Debtors’ indemnification obligations
under the Agreement, regardless of when they arose.
7.
Finally, Airgas reserves all rights to later object to the identity of the Proposed
Assignee and/or its ability to perform adequately in the future under the Agreement, once the
Proposed Assignee and its related financial and adequate assurance information is disclosed to
Airgas.
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WHEREFORE, for all of the foregoing reasons, Airgas respectfully requests that any
order entered by the Court regarding the assumption and assignment of the Agreement set a cure
amount in the Actual Cure Amount and be consistent with the relief requested herein, and that
the Court grant Airgas such other and further relief as is just and proper.
Dated: July 24, 2024
CONNOLLY GALLAGHER LLP
/s/ Karen C. Bifferato
Karen C. Bifferato (#3279)
1201 N. Market Street, 20th Floor
Wilmington, DE 19801
Telephone: (302) 757-7300
Email: kbifferato@connollygallagher.com
Attorneys for Airgas Therapeutics, LLC
05818766
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