Augusta Hitech Soft Solutions, LLC’s Cure Objection and Reservation — In re Vyaire Medical, Inc (Dkt. 502)

Summary

Augusta Hitech Soft Solutions, LLC's Cure Objection and Reservation of Rights regarding the Debtors' First Supplemental Notice of potentially assumed and assigned contracts, filed September 6, 2024 as Doc 502 in Vyaire Medical, Inc., et al., Case No. 24-11217 (BLS), in the U.S. Bankruptcy Court for the District of Delaware. Augusta states that the Debtors proposed a cure amount of $1,893,923.38 and that it is owed not less than $2,887,616.72. It argues under 11 U.S.C. § 365(b)(1) and § 365(b)(2) that defaults must be cured and adequate assurance provided, and asks the Court to deny authority to assume its contracts absent cure of all outstanding amounts.

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

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE

In re:
VYAIRE MEDICAL, INC., et al.,1

Debtors.

Chapter 11
Case No. 24-11217 (BLS)
(Jointly Administered)
RE: D.I. 462

AUGUSTA HITECH SOFT SOLUTIONS, LLC’S CURE OBJECTION AND
RESERVATION OF RIGHTS REGARDING DEBTORS’ FIRST SUPPLEMENTAL
NOTICE TO POTENTIALLY ASSUMED AND
ASSSIGNED CONTRACTS

COMES NOW Augusta Hitech Soft Solutions, LLC (“Augusta”), a creditor and contract
counter-party in the above-captioned Chapter 11 cases, submits this Cure Objection and Rights
Reservation in response to the proposed assumption of Augusta’s contracts in connection with the
First Supplemental Notice to Contract Parties of Potentially Assumed and Assigned Executory
Contracts and Unexpired Leases (Dkt. 462) (the “Notice of Cure Amount”) filed by Vyaire
Medical, Inc., et. al. (the “Debtors”).  In support of the Cure Objection and Rights Reservation,
Augusta states:
I.
RESERVATION OF RIGHTS
1.
The Debtors have approval from the Bankruptcy Court to assume and assign the
executory contracts between the Debtors and Augusta.  As discussed herein, Augusta objects to
the proposed assumption of its agreements as the Debtors and the proposed buyers have not cured
all outstanding amounts owed under the contracts, nor provided adequate assurance that such

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.
Case 24-11217-BLS    Doc 502    Filed 09/06/24    Page 1 of 4

2

amounts will be paid. Accordingly, Augusta objects and reserves all of its rights regarding the
Debtors’ proposed assumption of Augusta’s contracts.
II.
FACTUAL BACKGROUND
2.
The above captioned case was filed on June 9, 2024 (“Petition Date”).
3.
Augusta develops custom software solutions for customers and, pursuant to
agreements, provides software-related products, technical support, maintenance, educational
materials, and programs, as well as cloud-based and point of sale services. Prior to the Petition
Date, Augusta and the Debtors entered into several agreements for cloud and database services
(“Augusta Agreements”).
4.
On June 10, 2024, Debtors filed their Motion for Entry of an Order (I) Approving
Bidding Procedures…(V) Approving Procedures for the Assumption and Assignment of Contracts,
(IV) Approving the Sale of the Debtors’ Assets Free and Clear, and (VII) Granting Related Relief
[Dkt. 16].
5.
On July 11, 2024, the United States Bankruptcy Court for the District of Delaware
(the “Court”) entered the 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. 249] (the “Bidding Procedures Order”).
6.
On August 24, 2024, the Debtors filed the Notice if Cure Amount listing the
proposed cure amount in the amount of $1,893,923.38 for the assumption and potential assignment
of the Augusta Agreements.
Case 24-11217-BLS    Doc 502    Filed 09/06/24    Page 2 of 4

3

7.
On September 4, 2024, the Court entered orders approving the sale of assets to
buyers.
8.
Pursuant to the sale orders, the Debtors have the right to potentially assume and
assign the Augusta Agreements to the buyers.
9.
The Debtors and buyers must pay all sums owed in cure, including any post-petition
amounts which may have come due under the Augusta Agreements.   As of filing this Cure
Objection and Rights Reservation, Augusta is owed not less than $2,887,616.72.2   The pre-petition
amount owed is $1,889,243.37 (which is close to the Debtor’s proposed cure amount).  The post-
petition amount owed equals (1) $702,205.94, (2) estimate for August services is $296,167.41 and
(3) additional monies dues for post-petition services provided through the closing date of the sales.
III.
ARGUMENT
A.
To Assume the Augusta Agreements, the Debtors and Buyers Must Cure All
Arrearages.

10.
Before assuming an unexpired executory contract, a debtor must (1) cure (or
provide adequate assurance of a prompt cure of) any defaults under the subject contracts, and
(2) provide adequate assurance of future performance under the contract.  See 11 U.S.C. §
365(b)(1).  Absent the foregoing, a debtor may not assume an executory contract.
11.
At present, the cure amount is not less than $2,887,616.72.  Absent Debtors’ cure
of the outstanding amounts due Augusta, the Debtors may not assume Augusta’s agreements.
B.
Unless the Debtors Provide Adequate Assurance of Future Performance, the Court
Should Not Permit Assumption of Augusta’s Contracts.

12.
In addition to requiring that defaults be cured, Section 365(b)(2) of the Bankruptcy
Code obligates a debtor to provide adequate assurance of future performance under the contract

2 Invoices will be available to Debtors upon request.  Augusta is providing ongoing post-petition services so
additional monies will be due and owing through the closing date of the sale of the assets to the buyers.
Case 24-11217-BLS    Doc 502    Filed 09/06/24    Page 3 of 4

4

before the executory contract may be assumed. See 11 U.S.C. § 365(b)(2). The buyers have a
$5,000,000 cure cap in place and the Debtors promised to pay any cure amount above that cap.
Debtors have not indicated whether there will be sufficient funds to pay any overage.  In light of
the Debtors’ failure to provide either adequate assurance of prompt payment of the cure or future
performance under the contract, Augusta is unable to determine whether Debtors have complied,
or will comply, with all of the requirements of section 365(b) of the Bankruptcy Code.
Accordingly, Augusta reserves its rights to be heard regarding all assumption and cure issues.
IV.
CONCLUSION
For the reasons set forth above, Augusta respectfully requests that the Court deny the
Debtors’ request for authority to assume any Augusta contract absent cure of all outstanding
amounts due and owing to Augusta, and provision of adequate assurance regarding the proposed
assumptions.
Dated: September 6, 2024
GELLERT SEITZ BUSENKELL & BROWN, LLC
/s/ Charles J. Brown, III
Charles J. Brown, III (DE 3368)
1201 N. Orange Street, Suite 300
Wilmington, DE 19801
Telephone:  (302) 425-5813
Email:  cbrown@gsbblaw.com
AND
CARRINGTON, COLEMAN,  SLOMAN &
BLUMENTHAL, L.L.P.
By:    /s/ Jason M. Katz
Jason M. Katz (jkatz@ccsb.com)
Southern District No. 599556
901 Main Street, Suite 5500
Dallas, Texas 75202
(214) 855-3000 – Telephone
(214) 580-2641 – Facsimile

Attorneys For Creditor Augusta Hitech Soft Solutions, LLC

i_11420134v.1
Case 24-11217-BLS    Doc 502    Filed 09/06/24    Page 4 of 4

File and source

File

gov.uscourts.deb.193283.502.0.pdf

Size

256,930 bytes

SHA-256

e8c1465dc33a2f4cd06f0422e2303580fcb7d1a2b454d7f897111022069f4f95

Our copy

gov.uscourts.deb.193283.502.0.pdf

Original

PACER (login required)