Limited Objection of Cognizant to First Notice of Potentially Assumed Contracts — In re Vyaire Medical, Inc.

Summary

A Limited Objection of Cognizant to the First Notice to Contract Parties of Potentially Assumed and Assigned Executory Contracts and Unexpired Leases, filed August 22, 2024 as Doc 436 in Vyaire Medical, Inc., et al., Case No. 24-11217 (BLS), in the U.S. Bankruptcy Court for the District of Delaware. Cognizant Worldwide Limited and Cognizant Technology Solutions U.S. Corp. state that the Debtors owed $2,021,738.23 under a Master Services Agreement as of June 9, 2024, and that the Assumption Notice identifies a cure amount of $1,870,550.57. They argue under 11 U.S.C. § 365(a) that an executory contract must be assumed in its entirety and ask the Court to order assumption of the Agreement and payment of all outstanding amounts as cure costs.

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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE

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In re

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Chapter 11

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VYAIRE MEDICAL, INC., et al.,

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Case No. 24-11217 (BLS)

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Debtors.1

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Jointly Administered

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:

Related D.I. No. 256
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LIMITED OBJECTION OF COGNIZANT TO FIRST NOTICE TO CONTRACT
PARTIES OF POTENTIALLY ASSUMED AND ASSIGNED EXECUTORY
CONTRACTS AND UNEXPIRED LEASES

Cognizant Worldwide Limited and Cognizant Technology Solutions U.S. Corp.
(collectively “Cognizant”), by and through its undersigned counsel, hereby files this Limited
Objection to the First Notice to Contract Parties of Potentially Assumed and Assigned Executory
Contracts and Unexpired Leases (the “Assumption Notice”) (ECF No. 256) filed by Vyaire
Medical, Inc. and its affiliates (the “Debtors”).2  In support of this Limited Objection, Cognizant
states as follows:
BACKGROUND
1.
Pursuant to a Master Services Agreement, as amended from time to time, and
various statements of work and work orders issued thereunder (collectively, the “Agreement”),

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 The Debtors extended Cognizant’s deadline to object to the Assumption Notice to, and including, August 22, 2024.
Case 24-11217-BLS    Doc 436    Filed 08/22/24    Page 1 of 4

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Cognizant agreed to provide certain services to the Debtors and the Debtors agreed to pay for such
services as invoiced.
2.
On June 9, 2024 (the “Petition Date”), the Debtors filed for bankruptcy.
3.
As of the Petition Date, the Debtors owed $2,021,738.23 to Cognizant under the
Agreement for services rendered prior to the Petition Date.
4.
Following the Petition Date, Cognizant has continued to provide services to the
Debtors pursuant to the terms of the Agreement.  As part of any cure, the Debtors must pay both
the $2,021,738.23 pre-petition amount owed to Cognizant and any amount the Debtors owe to
Cognizant under the Agreement for post-petition services.
5.
On July 11, 2024, the Debtors filed the Assumption Notice.  See ECF No. 256.  The
Assumption Notice identifies a cure amount of $1,870,550.57. It is unclear if the Assumption
Notice proposes to assume the entire Agreement (which is what the Bankruptcy Code requires) or
portions of the Agreement.
LIMITED OBJECTION
6.
A debtor must assume or reject an executory contract in its entirety under 11 U.S.C.
§ 365(a).  See, e.g., In re Contract Research Sols., Inc., No. 12-11004 (KJC), 2013 Bankr. LEXIS
1784, at *4 (Bankr. D. Del. May 1, 2013) (“Assumption or rejection of an executory contract or
unexpired lease must be done in its entirety”); In re MF Global Holdings Ltd., 466 B.R. 239, 241
(Bankr. S.D.N.Y. 2012) (“An executory contract may not be assumed in part and rejected in part.”).
7.
In addition, “a debtor cannot assume such a contract unless the debtor satisfies
several statutory conditions designed to make the non-debtor contracting party whole.”  ReGen
Capital I, Inc. v. Halperin (In re Wireless Data, Inc.), 547 F.3d 484, 489 (2d Cir. 2008); see also
In re G-I Holdings, Inc., 580 B.R. 388 (Bankr. D.N.J. 2018). In particular, the debtor must “cure
Case 24-11217-BLS    Doc 436    Filed 08/22/24    Page 2 of 4

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the default, or provide adequate assurance that it will promptly cure it[.]”  Id.  This “strives to
restore the debtor-creditor relationship . . . to pre-default conditions . . . bringing the contract back
into compliance with its terms[.]”  Id. (internal citations omitted).
8.
The Agreement constitutes one integrated contract.  By the Assumption Notice, it
is unclear as to what the Debtors are proposing to do with respect to the Agreement.  To the extent
that the Debtors are attempting to not assume the Agreement in its entirety, Cognizant objects to
such proposed partial assumption and/or assignment.
9.
In addition, as part of any assumption, all pre-petition and post-petition amounts
owed under the Agreement must be paid in full.  Cognizant objects to the cure amounts and the
proposed assumption and assignment to the extent that the Debtors are not proposing to pay all
amounts that are owed.
RESERVATION OF RIGHTS
10.
Cognizant reserves the right to make such other and further objections as may be
appropriate, and does not waive and hereby reserves all of its rights, remedies, and arguments with
respect to the Assumption Notice (and any other proposed assumption and assignment of the
Agreement that the Debtors have filed and/or may file in the future).
WHEREFORE, Cognizant respectfully requests that the Court:
(A)
Order the Debtors to assume the Agreement in its entirety;
(B)
Order the Debtors to pay all amounts outstanding as set forth herein (both pre-
petition and post-petition and well as the amounts that continue to come due) as cure costs; and
(C)
Grant such other and further relief as is just and appropriate under the
circumstances.

Case 24-11217-BLS    Doc 436    Filed 08/22/24    Page 3 of 4

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Dated: August 22, 2024

Respectfully submitted,

Wilmington, DE

/s/ R. Craig Martin

R. Craig Martin (DE 5032)

Matthew S. Sarna (DE 6578)

1201 North Market Street, Suite 2100

Wilmington, Delaware 19801

Tel: (302) 468-5700

Fax: (302) 394-2341

Email: craig.martin@us.dlapiper.com

matthew.sarna@us.dlapiper.com

and

Dale K. Cathell

Virginia R. Callahan

DLA Piper LLP (US)

650 South Exeter Street, Suite 1100

Baltimore, Maryland 21202

Telephone: (410) 580-3000

Facsimile: (410) 580-3001

Email: Dale.Cathell@us.dlapiper.com

virginia.callahan@us.dlapiper.com

Counsel for Cognizant Worldwide Limited and
Cognizant Technology Solutions U.S. Corp.

Case 24-11217-BLS    Doc 436    Filed 08/22/24    Page 4 of 4

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