services of K+N pursuant to that certain Logistics Services Agreement dated June 1, 2019 (as
- Date
- 2024-09-06
Summary
A supplemental objection by Kuehne + Nagel Inc. (K+N) to the debtors' First Supplemental Notice to Contract Parties of Potentially Assumed and Assigned Contracts and Unexpired Leases [Docket No. 462], filed September 5, 2024 as Doc 498 in In re: Vyaire Medical, Inc, et al., Case No. 24-11217 (BLS), in the U.S. Bankruptcy Court for the District of Delaware. K+N states that it provided logistics and warehousing services under a Logistics Services Agreement dated June 1, 2019, and that the supplemental notice lists a proposed cure cost of $2,100,000. K+N asserts that the cure amount through August 31, 2024 is $2,424,864.44 and continuing to accrue, and that it holds a possessory lien on warehoused goods. It asks the court to require payment of that amount and adequate assurance of future performance before any assumption and assignment.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Full text
Case 24-11217-BLS Doc 498 Filed 09/05/24 Page 1 of 5
IN 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)
)
) Hearing Date: TBD
) Obj Deadline: September 6, 2024 at 4:00 pm (ET)
SUPPLEMENTAL OBJECTION TO FIRST SUPPLEMENTAL NOTICE TO
CONTRACT PARTIES OF POTENTIALLY ASSUMED
AND ASSIGNED EXECUTORY CONTRACTS AND UNEXPIRED LEASES FIRST
NOTICE TO CONTRACT PARTIES OF POTENTIALLY ASSUMED AND
ASSIGNED EXECUTORY CONTRACTS AND UNEXPIRED LEASES
Kuehne + Nagel Inc. (“K+N”), by its undersigned counsel, hereby submits this
supplemental objection to the Debtors’ First Supplemental Notice to Contract Parties of Potentially
Assumed and Assigned Contracts and Unexpired Leases [Docket No. 462] (the “Supplemental
Assumption Notice”). In support of its Supplemental Objection, K+N respectfully alleges as
follows:
Factual Background
1. On June 9, 2024, (the “Petition Date”), the Debtors each filed a voluntary
petition for relief pursuant to Chapter 11 of the Bankruptcy Code.
2. As the Court is aware, in the pre-petition period the Debtors employed the
services of K+N pursuant to that certain Logistics Services Agreement dated June 1, 2019 (as
amended) between K+N and the Debtors (the “Agreement”). Under the Agreement, K+N
provided logistics and warehousing services to the Debtor.
3. On July 11, 2024, the Debtor filed the Cure Notice with Exhibit A [Docket
No. 256]. Exhibit A sets forth the contracts that the Debtors may potentially assume and assign as
Case 24-11217-BLS Doc 498 Filed 09/05/24 Page 2 of 5
part of their sale to a third-party buyer along with the proposed Cure Cost to be paid in order to
effectuate the proposed assumption and assignment (the “Initial Potential Assumption Notice”).
For the K+N Agreement, the Initial Potential Assumption Notice listed the cure cost as zero.
4. In response to the Initial Potential Assumption Notice, K+N filed it
Objection to the Debtors’ First Notice to Contract Parties of Potentially Assumed and Assigned
Contracts and Unexpired Leases [Document No. 315] and its corresponding Exhibit A [Document
318] (together the “Cure Objection”).1 The Cure Objection established that as of July 15, 2024,
the amount due to K+N under the Agreement was no less than $2,298,309.55.
5. On August 24, 2024, the Debtors filed their Supplemental Assumption
Notice which updated the proposed cure cost necessary to assume and assign the K+N Agreement
to $2,100,000. See pg. 7 of Supplemental Assumption Notice.
6. As of August 31, 2024, the cure cost related to the Agreement is in fact
$2,424,864.44 as of August 30, 2024, and continuing to accrue.
Objection
7. Any assumption and assignment of the Agreement must be conditioned on
the Debtors’ compliance with the requirements of section 365 of the Bankruptcy Code, including,
but not limited to, paying all amounts due and owing under the Agreement through the effective
date of any assumption and assignment of the same
8. As evidenced in the secured of proof of claim filed on the official claims
register on July 15, 2024 and designated as Claim No. 35, the Debtors owe K+N no less than
$2,298,309.55 for services performed under the Agreement as of the date of the proof through June
2024 (the “K+N POC”). Since that time, the costs for continued warehousing of the inventory
1
K+N respectfully incorporates by reference its previously filed Cure Objection as if reproduced in its
entirety here.
2
Case 24-11217-BLS Doc 498 Filed 09/05/24 Page 3 of 5
have increased to no less than $2,424,864.44 through August 31, 2024. A copy of the K+N POC
is attached to the Cure Objection as Exhibit A [Docket No. 318]. Attached hereto as Exhibit 1 is
an updated statement of account and invoice for the amounts accrued since the K+N POC was
filed.
9. Thus, the total cure costs through August 31, 2024 is $2,424,864.44 plus
accrued charges up to the date of any assignment and assumption (the “Cure Amount”).
10. Pursuant to its possessory lien rights, K+N continues to warehouse the
Debtors’ goods consisting of medical device parts and inventory. A schedule of the K+N
Collateral is attached as Exhibit A to its Limited Objection and Reservation of Rights previously
filed at Docket No. 133. The debt owed to K+N continues to accrue warehousing costs related to
the K+N Collateral, including, but not limited to, monthly rent and cost of labor to maintain the
goods in the facility.2
11. Pursuant to section 365 of the Bankruptcy Code, K+N is entitled to adequate
assurance of any proposed assignee’s future performance of the Agreement obligations, including
but not limited to the assignee’s financial wherewithal to meet its payment obligations. To the
extent the Agreement is to be assumed and assigned, K+N requests that such information be
promptly provided to K+N and its counsel. Moreover, K+N reserves its rights to object if it is not
timely provided with adequate assurance of any proposed assignee’s ability and intent to cure all
defaults under the Agreement and to provide adequate assurance of future performance, or if the
information provided is inadequate in any respect.
2
It is undisputed that K+N is a secured creditor due by virtue of its possession of the K+N Collateral
under the Agreement, applicable state law, including but not limited to, sections 7-209, 7-210, and 9-333
of the Uniform Commercial Code, and the common law on possession of freight forwarders and
warehousemen. A possessory lien holder’s collateral cannot be sold free and clear under section 363 of
the Bankruptcy Code unless such entity’s claim is satisfied or otherwise consents. See 11 U.S.C.
363(f)(2)
3
Case 24-11217-BLS Doc 498 Filed 09/05/24 Page 4 of 5
Reservation of Rights
12. Nothing in this Objection is intended to be, or should be construed as, a
waiver by K+N of any of its rights as a possessory lien holder and secured creditor under the
Agreement, the Bankruptcy Code, and applicable law. K+N expressly reserves all such rights,
including, without limitation, the right to: (a) supplement and/or amend this Objection and to assert
any additional objections with respect to the proposed cure amount and adequate assurance of
future performance; (b) amend the Cure Amount; and (c) assert any further objections as it deems
necessary or appropriate.
Remainder of Page Intentionally Blank
4
Case 24-11217-BLS Doc 498 Filed 09/05/24 Page 5 of 5
Conclusion
WHEREFORE, K+N respectfully requests that this Court enter an Order: (a)
sustaining this Objection; (b) in the event of any proposed assumption and assignment of the
Agreement, requiring the Debtors and or the assignee to pay all amounts due and owing to K+N
in the amount of $2,424,864.44 plus the costs accrued through the effective date of any assumption
and assignment as well as providing evidence of adequate assurance of future performance by any
proposed assignee; and (c) granting K+N such other and further relief as this Court deems just and
proper.
Respectfully submitted,
Date: September 5, 2024 BIELLI & KLAUDER, LLC
Wilmington, Delaware
/s/ David M. Klauder
David M. Klauder, Esquire (No. 5769)
1204 N. King Street
Wilmington, DE 19801
Phone: (302) 803-4600
dklauder@bk-legal.com
-and-
HALPERIN BATTAGLIA BENZIJA, LLP
Walter Benzija, Esquire (admitted pro hac vice)
40 Wall Street, 37th Floor
New York, NY 10005
Telephone (212) 765-9100
wbenzija@halperinlaw.net
Co-counsel for Kuehne + Nagel Inc.
5
File and source
- File
- gov.uscourts.deb.193283.498.0.pdf
- Size
- 159,057 bytes
- SHA-256
- f4a951bea64427bff2ca8c09542a40950738029f2d845a44cf5606b99debf2c1
- Original
- PACER (login required)