Vyaire re. PJT's First Monthly Fee Application (06.09 - 06.30.24)
- Date
- 2024-07-30
Summary
The First Monthly Fee Application of PJT Partners LP as investment banker to the debtors in Vyaire Medical, Inc., et al., Case No. 24-11217 (BLS), a jointly administered Chapter 11 case in the United States Bankruptcy Court for the District of Delaware, filed August 15, 2024 as Doc 389. It seeks compensation and reimbursement for June 9, 2024 through June 30, 2024, stating monthly fees of $128,333.33, out-of-pocket expenses of $145.00 and an amount due of $102,811.66 after a 20% holdback of $25,666.67. The application recites that the court entered an order on July 30, 2024 approving the retention effective as of June 9, 2024 under an engagement letter dated April 25, 2024, and lists the investment banking services to be provided. A summary sheet gives the hours recorded by each professional and an invoice is attached as Appendix B. The document is 12 pages.
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Case 24-11217-BLS Doc 389 Filed 08/15/24 Page 1 of 12
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
----------------------------------------------------------
)
In re ) Chapter 11
)
VYAIRE MEDICAL, INC., et al., 1 ) 24-11217 (BLS)
)
Debtors. ) (Jointly Administered)
)
----------------------------------------------------------
FIRST MONTHLY FEE APPLICATION OF PJT PARTNERS LP AS
INVESTMENT BANKER TO THE DEBTORS AND DEBTORS-IN-POSSESSION FOR
ALLOWANCE OF COMPENSATION FOR SERVICES RENDERED AND FOR THE
REIMBURSEMENT OF ALL ACTUAL AND NECESSARY EXPENSES INCURRED
FOR THE PERIOD OF JUNE 9, 2024 THROUGH JUNE 30, 2024
SUMMARY SHEET
Name of Applicant: PJT Partners LP
Authorized to Provide
Professional Services to: Debtors
Date of Retention: Order entered on July 30, 2024 approving the
retention of PJT Partners LP effective as of June
9, 2024 [Docket No. 335]
Period for which Compensation
And Reimbursement is Sought: June 9, 2024 through June 30, 2024
Amount of Compensation sought
As Actual, Reasonable, and Necessary: $128,333.33
Amount of Expense Reimbursement Sought
As Actual, Reasonable, and Necessary: $145.00
Amount of Cash Payment Sought: $102,811.66
This is a x monthly interim final application
1
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.
Case 24-11217-BLS Doc 389 Filed 08/15/24 Page 2 of 12
Professional Initials of Position of the Hourly Total Total
Professional Applicant, Billing Hours Compensation
Person or Number of Rate
Other Years in that (including
Reference Position, changes)
ID Used in Prior
the Relevant
Application Experience,
for the Year of
Professional Obtaining
Person License to
Practice, Area
of Expertise
Jamie Baird N/A Partner N/A 17.0 N/A
Rakesh Patel N/A Partner N/A 2.0 N/A
Michael Schlappig N/A Managing Director N/A 41.5 N/A
Amit Sharma N/A Managing Director N/A 2.0 N/A
Sammy Lamali N/A Director N/A 2.0 N/A
Dylan Friesner N/A Vice President N/A 110.5 N/A
May Li N/A Associate N/A 2.0 N/A
Ahmad Choudhry N/A Analyst N/A 121.0 N/A
Raymond Mason N/A Analyst N/A 70.5 N/A
Case 24-11217-BLS Doc 389 Filed 08/15/24 Page 3 of 12
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
----------------------------------------------------------
)
In re ) Chapter 11
)
VYAIRE MEDICAL, INC., et al., 1 ) 24-11217 (BLS)
)
Debtors. ) (Jointly Administered)
)
----------------------------------------------------------
FIRST MONTHLY FEE APPLICATION OF PJT PARTNERS LP AS
INVESTMENT BANKER TO THE DEBTORS AND DEBTORS-IN-POSSESSION FOR
ALLOWANCE OF COMPENSATION FOR SERVICES RENDERED AND FOR THE
REIMBURSEMENT OF ALL ACTUAL AND NECESSARY EXPENSES INCURRED
FOR THE PERIOD OF JUNE 9, 2024 THROUGH JUNE 30, 2024
PJT Partners LP (“PJT”), investment banker to the above-captioned debtors and
debtors-in-possession (collectively, the “Debtors”) respectfully represents as follows:
Background
1. On June 9, 2024 (the “Petition Date”), the Debtors filed a voluntary petition for
relief under chapter 11 of title 11 of the United States Code, 11 U.S.C. §§ 101 et seq., as amended
(the “Bankruptcy Code”). The Debtors are operating their businesses and managing their
properties as debtors-in-possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code.
2. On July 9, 2024, this Court entered the Order (I) Establishing Procedures for
Interim Compensation and Reimbursement of Expenses for Retained Professionals and (II)
Granting Related Relief [Docket No. 218] (the “Procedures Order”) establishing procedures for
interim compensation and reimbursement of expenses for professionals.
1
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.
Case 24-11217-BLS Doc 389 Filed 08/15/24 Page 4 of 12
3. On July 9, 2024, the Debtors filed the Application of Debtors for Entry of An Order
(I) Authorizing the Retention and Employment of PJT Partners LP as Investment Banker to the
Debtors and Debtors In Possession Effective as of the Petition Date, (II) Waiving Certain
Information Requirements Pursuant to Local Rule 2016-2, and (II) Granting Related Relief
[Docket No. 240] (the “Retention Application”), pursuant to which the Debtors sought authority
to employ and retain PJT as their investment banker pursuant to the terms of an engagement letter
(the “Engagement Letter”) dated April 25, 2024. A copy of the Engagement Letter was attached
to the Retention Application.
4. On July 30, 2024, this Court entered the Order (I) Authorizing the Retention and
Employment of PJT Partners LP as Investment Banker to the Debtors and Debtors in Possession
Effective as of the Petition Date, (II) Waiving Certain Information Requirements Pursuant to Local
Rule 2016-2, and (III) Granting Related Relief [Docket No. 335] (the “Retention Order”)
approving the Retention Application and authorizing the employment and retention of PJT
effective as of June 9, 2024, pursuant to the terms of the Engagement Agreement as modified by
the Retention Order.
5. PJT submits this first monthly fee application (the “First Monthly Fee
Application”) requesting the allowance of Monthly Fees (as defined below) earned for investment
banking services rendered to the Debtors during the period of June 9, 2024 through June 30, 2024
(the “First Compensation Period”).
6. Investment banking services and out-of-pocket expenses for which compensation
and reimbursement are sought were rendered or incurred on behalf of the Debtors pursuant to
chapter 11 of the Bankruptcy Code.
2
Case 24-11217-BLS Doc 389 Filed 08/15/24 Page 5 of 12
The PJT Engagement
7. Pursuant to the Engagement Letter, PJT was retained to provide the following
services to the Debtors:2
(a) assist in the evaluation of the Debtors’ businesses and prospects;
(b) assist in the development of the Debtors’ long-term business plan and related
financial projections;
(c) assist in the development of financial data and presentations to the Debtors’ board
of directors, various creditors and/or third parties;
(d) analyze the Debtors’ financial liquidity and evaluate alternatives to improve such
liquidity;
(e) analyze various Restructuring scenarios and the potential impact of these scenarios
on the recoveries of those stakeholders impacted by the Restructuring;
(f) provide strategic advice with regard to restructuring or refinancing the Debtors’
Obligations;
(g) evaluate the Debtors’ debt capacity and alternative capital structures;
(h) participate in negotiations among the Debtors and their creditors, suppliers, lessors,
and other interested parties and/or potential financing parties;
(i) value securities offered by the Debtors in connection with a Restructuring;
(j) provide financial and valuation advice and assistance to the Debtors in developing
and seeking approval of an in-court Restructuring (including a Chapter 11 plan);
(k) advise the Debtors and negotiate with lenders with respect to potential waivers or
amendments of various credit facilities;
(l) assist in arranging financing for the Debtors, as requested;
(m) provide expert witness testimony concerning any of the subjects encompassed by
the other investment banking services; and
(n) provide such other advisory services as are customarily provided in connection with
the analysis and negotiation of a transaction similar to a potential Restructuring
and/or Capital Raise, as requested and mutually agreed.
2
Capitalized terms used but not defined herein shall have the meanings provided thereto in the Engagement Letter.
3
Case 24-11217-BLS Doc 389 Filed 08/15/24 Page 6 of 12
8. Pursuant to the Engagement Letter, as approved by the Retention Order, the
Debtors agreed to pay PJT as follows in consideration for the services rendered:3
(a) Monthly Fee: The Debtors shall pay a monthly advisory fee (the “Monthly Fee”)
in the amount of $175,000. Fifty percent (50%) of the first $1,050,000 in Monthly
Fees paid to PJT under the Engagement Letter and/or the Prior Letter shall be
credited, once and without duplication, against any Restructuring and/or Capital
Raising Fee, up to a maximum total aggregate credit against all such fees equal to
$525,000.
(b) Capital Raising Fee: The Debtors shall pay a capital raising fee (the “Capital
Raising Fee”) for any Capital Raise, earned and payable upon the earlier of the
receipt of a binding commitment letter and the closing of such Capital Raise. If
access to the financing is limited by orders of the bankruptcy court, a proportionate
fee shall be payable with respect to each available commitment (irrespective of
availability blocks, borrowing base, or other similar restrictions). The Capital
Raising Fee will be calculated as:
Senior Debt (other than Structured Financing): One-and-a-half percent
(1.5%) of the total issuance and/or committed amount of senior debt financing,
excluding senior debt financing that is or may (or is anticipated in the future to)
constitute a Structured Financing,
Junior Debt (and Structured Financing): Three-percent (3.0%) of the total
issuance and/or committed amount of (A) Structured Financing, (B) junior debt
financing, or (C) unsecured debt financing (including, without limitation,
financing that is junior in right of payment, second lien, subordinated
(structurally or otherwise) and unsecured debt), and
Equity Financing: Five-percent (5.0%) of the issuance and/or committed
amount of equity financing,
in each case, including by means of a back-stop commitment; provided that, (x) the
minimum Capital Raise Fee in respect of any Capital Raise shall be $750,000, and
(y) if any portion of the debt or equity financing is raised from Apax Partners, LLP
or its affiliates (collectively, the “Sponsor”), then PJT Partners shall be entitled to
receive 50% of the Capital Raising Fee (the “Sponsor Capital Raising Fee”) to
which it otherwise would have been entitled in respect of any debt or equity
financing raised from the Sponsor.
(c) Restructuring Fee: The Debtors shall pay a fee in respect of a Restructuring (the
“Restructuring Fee”) equal to $7,000,000, earned and payable upon the
consummation of a Restructuring.
3
This description of PJT’s compensation structure is for summary and illustrative purposes only. The terms of the
Engagement Letter, as modified and approved by the Retention Order, shall apply to any such compensation awarded
to PJT.
4
Case 24-11217-BLS Doc 389 Filed 08/15/24 Page 7 of 12
(d) Expense Reimbursements: In addition to the fees described above, the Debtors
agree to reimburse PJT for all reasonable and documented out-of-pocket expenses
incurred during PJT’s engagement, including, but not limited to, travel and lodging,
direct identifiable data processing, document production, publishing services and
communication charges, courier services, working meals, reasonable and
documented fees and expenses of PJT’s outside counsel (without the requirement
that the retention of such counsel be approved by the court in any bankruptcy case),
and other necessary expenditures, payable upon rendition of invoices setting forth
in reasonable detail the nature and amount of such expenses Further, in connection
with the reimbursement, contribution and indemnification provisions set forth in
the Engagement Letter and Attachment A to the Engagement Letter (the
“Indemnification Agreement”), which is incorporated therein by reference and
addressed further below, the Debtors agree to reimburse each PJT Party, for its legal
and other expenses (including the cost of any investigation and preparation) as they
are incurred in connection with any matter in any way relating to or referred to in
the Engagement Letter or arising out of the matters contemplated by the
Engagement Letter (including, without limitation, in enforcing the Engagement
Letter), subject to certain exceptions, limitations, and requirements set forth in the
Indemnification Agreement.
Services Provided by PJT during the First Compensation Period
9. PJT has rendered professional services to the Debtors as requested and in
furtherance of the interests of the Debtors and the Debtors’ estate. The variety and complexity of
the issues in this chapter 11 case and the need to act or respond to such issues on an expedited
basis have required the expenditure of substantial time by PJT personnel. PJT respectfully submits
that the professional services that it rendered on behalf of the Debtors were necessary and
appropriate, and have directly contributed to the effective administration of this chapter 11 case.
The following summary of services rendered during the First Compensation Period is not intended
to be an exhaustive description of the work performed; rather, it is merely an attempt to highlight
certain of those areas in which PJT rendered services to the Debtors:
(a) evaluated the Debtors’ businesses and prospects;
(b) assisted in the development of materials for the Debtors’ Special Committee of the
Board (the “Special Committee”);
(c) conducted the post-petition sale process, including, among other activities,
management meetings and extensive due diligence;
5
Case 24-11217-BLS Doc 389 Filed 08/15/24 Page 8 of 12
(d) analyzed non-binding bids received in connection with the sale process;
(e) prepared and filed a declaration in support of the DIP financing;
(f) participated in meeting(s) with the Special Committee;
(g) participated in discussions among the Debtors, their other advisors and the Debtors’
various creditors, including the 1L Ad Hoc Group and the Official Committee of
Unsecured Creditors; and
(h) provided support to counsel with regards to various matters.
The PJT Team
10. The investment banking services set forth above were performed primarily by:
Jamie Baird, Partner; Michael Schlappig, Managing Director; Dylan Friesner, Vice President;
Ahmad Choudhry, Analyst and other PJT professionals as needed. Details of the background and
experience of the professionals currently employed at PJT are provided in Appendix A.
PJT’s Request for Allowance of Compensation and
Reimbursement of Out-of-Pocket Expenses
11. For the First Compensation Period, PJT (a) earned Monthly Fees in the amount of
$128,333.33, and incurred out-of-pocket expenses in the amount of $145.00, and (b) in accordance
with the Procedures Order, seeks allowance and payment of Monthly Fees and out-of-pocket
expenses in the aggregate amount of $102,811.66 (representing 80% of the total amount of PJT’s
Monthly Fees earned and 100% of the total amount of out-of-pocket expenses incurred by PJT
during the First Compensation Period). Out-of-pocket expenses incurred by PJT during the First
Compensation Period but not yet processed due to timing, will be submitted at a later date.
Although every effort has been made to include all expenses incurred during the First
Compensation Period, some expenses might not be included in this First Monthly Fee Application
due to delays caused in connection with the accounting and processing of such expenses.
Accordingly, PJT reserves the right to make further application to this Court for allowance of such
expenses incurred during the First Compensation Period but not included.
6
Case 24-11217-BLS Doc 389 Filed 08/15/24 Page 9 of 12
12. An invoice detailing the Monthly Fees earned and out-of-pocket expenses incurred
during the First Compensation Period is attached hereto as Appendix B. A summary of the
Monthly Fees earned and out-of-pocket expenses incurred during the First Compensation Period
is below:
Monthly Holdback @ Out-of-Pocket Amount(s)
First Compensation Period Fees 20% Expenses Due
June 9 – 30, 20244 $128,333.33 ($25,666.67) $145.00 $102,811.66
13. PJT respectfully submits that the compensation requested for the services rendered
by PJT to the Debtors during the First Compensation Period is fully justified and reasonable based
upon (a) the complexity of the issues presented, (b) the skill necessary to perform the financial
advisory services properly, (c) the preclusion of other employment, (d) the customary fees charged
to clients in non-bankruptcy situations for similar services rendered, (e) time constraints required
by the exigencies of the case, and (f) the experience, reputation and ability of the professionals
rendering services.
14. PJT respectfully submits that the services it has rendered to the Debtors have been
necessary and in the best interests of the Debtors and the Debtors’ estate. PJT respectfully submits
that under the criteria normally examined in chapter 11 reorganization cases, the compensation
requested by PJT is reasonable in light of the work performed by PJT during these chapter 11
cases.
15. The amount of the compensation sought in this First Monthly Fee Application and
PJT’s billing practices are consistent with market practices in a bankruptcy context. PJT has never
billed its clients based on the number of hours expended by its professionals. Accordingly, PJT
does not have hourly rates for its professionals, and PJT’s professionals generally do not maintain
detailed time records of the work performed for its clients. However, PJT has maintained
4
Pro-rated Monthly Fee calculated as follows: 22 days out of 30 days multiplied by $175,000.00.
7
Case 24-11217-BLS Doc 389 Filed 08/15/24 Page 10 of 12
contemporaneous time records in this case in one-half hour increments. Time records of the 368.5
hours expended by PJT professionals in providing investment banking services to the Debtors
during the First Compensation Period are provided in Appendix C.
16. A summary of hours expended by PJT professionals during the First Compensation
Period is provided below:
Hours Expended By Professional
Professional Total
Jamie Baird 17.0
Rakesh Patel 2.0
Michael Schlappig 41.5
Amit Sharma 2.0
Sammy Lamali 2.0
Dylan Friesner 110.5
May Li 2.0
Ahmad Choudhry 121.0
Raymond Mason 70.5
Total 368.5
17. Out-of-pocket expenses incurred by PJT are charged to a client if out-of-pocket
expenses are incurred for the client or are otherwise necessary in connection with services rendered
for such particular client. PJT does not factor general overhead expenses into any disbursements
charged to its clients in connection with chapter 11 cases. PJT has followed its general internal
policies with respect to out-of-pocket expenses billed as set forth below, with any exceptions
specifically explained.
(a) All cross-country airfare charges are based upon coach class rates.
(b) With respect to local travel, PJT's general policy enables employees to travel by
taxi or, in certain circumstances private car service, to and from meetings while
rendering services to a client on a client related matter, for which the client is
charged. Further, and primarily for safety reasons, employees are permitted to
charge to a client the cost of transportation home if an employee is required to work
past 9:00 p.m. on weekdays on client specific matters.
(c) PJT's general policy permits its professionals to charge in-office dinner meals to a
client after working 3 hours beyond their regularly scheduled workday if an
employee is required to provide services to the client during such dinnertime, and
to charge in-office meals on the weekend if an employee is required to provide
services to a client on the weekend and spends at least 4 hours in the office.
8
Case 24-11217-BLS Doc 389 Filed 08/15/24 Page 11 of 12
(d) The External Research category of expenses includes charges from outside
computer/electronic service companies that supply, for a fee, research and/or
financial documents to PJT. The services provided by these companies primarily
consist of the retrieval of financial documents from regulatory agencies and/or the
retrieval of research that would not otherwise be available to PJT. The Internal
Research category of expenses are the charges for time spent by PJT research staff
in operating the computer/electronic terminals related to these computer/electronic
service companies.
(e) The Publishing Services category of expenses includes charges for the production
of text-based publications such as research reports and presentations, and printing
and binding services.
18. All services for which PJT requests compensation were performed for and on behalf
of the Debtors and not on behalf of any other person or stakeholder.
19. No agreement or understanding exists between PJT and any other entity for the
sharing of compensation received or to be received for services rendered in or in connection with
this proceeding.
Certificate of Compliance and Waiver
20. Finally, the undersigned representative of PJT certifies that PJT has reviewed the
requirements of Rule 2016-2 of the Local Rules of Bankruptcy Practice and Procedure of the
United States Bankruptcy Court for the District of Delaware (the “Local Rules”) and that this First
Monthly Fee Application substantially complies with that Local Rule. To the extent that this First
Monthly Fee Application does not comply in all respects with the requirements of Local Rule
2016-2, PJT believes that such deviations are not material and respectfully requests that any such
requirement be waived.
9
Case 24-11217-BLS Doc 389 Filed 08/15/24 Page 12 of 12
Requested Relief
WHEREFORE, PJT requests that the Court:
(a) grant interim allowance of (i) PJT’s Monthly Fees earned in the amount of
$175,000.00, and (ii) the reimbursement of PJT’s out-of-pocket expenses incurred
in the amount of $145.00 during the First Compensation Period;
(b) authorize and direct the Debtors to pay PJT’s allowed and unpaid Monthly Fees
earned during the First Compensation Period as follows:
Monthly Fees $128,333.33
Less: Holdback @ 20% (25,666.67)
Out-of-Pocket Expenses 145.00
Amount Due PJT $102,811.66
and
(c) grant such other and further relief as the Court deems just and proper.
Dated: August 15, 2024 PJT Partners LP
Investment Banker to the Debtors
By: /s/ James H. Baird
James H. Baird
Partner
280 Park Avenue
New York, NY 10017
(212) 364-7800
10
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