Vyaire - Second Monthly Fee Application (August 2024)
- Date
- 2024-10-22
Summary
The second monthly fee application of McDermott Will & Emery LLP, counsel to the Official Committee of Unsecured Creditors, filed October 1, 2024 as Doc 592 in the jointly administered chapter 11 cases of Vyaire Medical, Inc., et al., Case No. 24-11217 (BLS), in the U.S. Bankruptcy Court for the District of Delaware. It seeks allowance of $429,504.32, stated as 80% of $536,880.40 in fees, plus reimbursement of $1,664.69 in expenses, for the period August 1, 2024 through August 31, 2024. It reports 470.2 hours billed and a 15% client accommodation of $94,743.60, and breaks fees down by project category, including $226,169.00 for contested and litigation-related matters and $209,060.50 for asset disposition. The application is brought under sections 330 and 331 of the Bankruptcy Code, Bankruptcy Rule 2016 and Local Rule 2016-2, and runs 16 pages.
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Case 24-11217-BLS Doc 592 Filed 10/01/24 Page 1 of 16
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
) Chapter 11
In re: )
) Case No. 24-11217 (BLS)
VYAIRE MEDICAL, INC., et al.,1 )
) (Jointly Administered)
Debtors. )
) Obj. Deadline: 10/22/24 at 4:00 p.m. (ET)
) Hrg. Date: Only if an objection is filed
SUMMARY OF SECOND MONTHLY FEE APPLICATION OF
MCDERMOTT WILL & EMERY LLP, COUNSEL TO THE OFFICIAL
COMMITTEE OF UNSECURED CREDITORS, FOR ALLOWANCE OF
COMPENSATION AND REIMBURSEMENT OF EXPENSES FOR THE
PERIOD FROM AUGUST 1, 2024 THROUGH AUGUST 31, 2024
Name of Applicant: MCDERMOTT WILL & EMERY LLP
Authorized to provide professional Official Committee of Unsecured
services to: Creditors of Vyaire Medical, Inc., et al.
Date of retention: July 30, 2024, effective June 28, 2024
Period for which compensation and
reimbursement are sought: August 1, 2024 through August 31, 2024
Amount of compensation sought as actual,
reasonable, and necessary: $429,504.32 (80% of $536,880.40)
Amount of reimbursement sought as actual,
reasonable, and necessary: $1,664.69
This is a: Monthly Fee Application
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 592 Filed 10/01/24 Page 2 of 16
Prior Monthly Applications:
MONTHLY FEE REQUESTED FEES APPROVED FEES HOLDBACK
APPLICATION AND EXPENSES AND EXPENSES
Application CNO Period Requested Requested Approved Approved Fees
Docket No. Date Covered Fees Expenses Fees Expenses Holdback
Date Filed Filed (80%) (100%) (20%)
Docket
No.
First 9/16/24 6/28/24- $738,990.00 $3,295.01 $591,192.00 $3,295.01 $147,798.00
Monthly D.I. 525 7/31/24
D.I. 402
8/21/24
Total $738,990.00 $3,295.01 $591,192.00 $3,295.01 $147,798.00
ii
Case 24-11217-BLS Doc 592 Filed 10/01/24 Page 3 of 16
OFFICIAL COMMITTEE OF UNSECURED
CREDITORS OF VYAIRE MEDICAL, INC., ET AL.
SUMMARY OF BILLING BY PROFESSIONAL
AUGUST 1, 2024 THROUGH AUGUST 31, 2024
Position with
Name of Date of Total
the Applicant Hourly Total
Professional Bar Billed
and Practice Billing Rate2 Compensation
Person Admission Hours
Area
Partner;
Kristin K. Going 2002 Corporate $1,750 15.3 $26,775.00
Advisory
Partner;
David R. Hurst 1998 Corporate $1,750 56.8 $99,400.00
Advisory
Partner;
Darren Azman 2011 Corporate $1,650 28.3 $46,695.00
Advisory
Partner;
Maris J. Kandestin 2004 Corporate $1,650 75.3 $124,245.00
Advisory
Partner;
William Hadler 2008 Corporate $1,575 4.9 $7,717.50
Advisory
Partner;
Kelly D. Newsome 2015 White Collar $1,525 50.9 $77,622.50
& Securities
Partner;
Riley Orloff 2015 Corporate $1,525 4.5 $6,862.50
Advisory
Partner;
Kevin M. Regan 2018 $1,350 21.5 $29,025.00
Trial
Associate;
Nick W. Greiner 2018 Corporate $1,245 4.9 $6,100.50
Advisory
Associate;
Carole Wurzelbacher 2015 Corporate $1,245 55.4 $68,973.00
Advisory
Associate;
Kristin E. Schwam 2020 White Collar $1,200 41.1 $49,320.00
& Securities
2
Except as set forth below, the rate represents the current standard hourly rate of each McDermott attorney and
paralegal who rendered legal services.
iii
Case 24-11217-BLS Doc 592 Filed 10/01/24 Page 4 of 16
Position with
Name of Date of Total
the Applicant Hourly Total
Professional Bar Billed
and Practice Billing Rate2 Compensation
Person Admission Hours
Area
Associate;
Marissa L. Hill Daley 2017 $1,155 1.6 $1,848.00
Healthcare
Associate;
Jesse E. Douglas 2020 Corporate $1,155 2.4 $2,772.00
Advisory
Associate;
Benjamin Glass 2023 Corporate $925 7.3 $6,752.50
Advisory
Associate;
Rebecca E. Trickey 2022 Corporate $925 43.0 $39,775.00
Advisory
Law Clerk;
Matthew G. Gibson N/A $805 29.3 $23,586.50
Trial
Paralegal;
Daniel D. Northrop N/A Corporate $745 5.0 $3,725.00
Advisory
Technology
Edward Y. Kwon N/A Project $570 5.7 $3,249.00
Manager
Paralegal;
Nolley M. Rainey N/A Corporate $500 11.0 $5,500.00
Advisory
Litigation
Fitalesh G. Belayneh N/A Technology $280 1.5 $420.00
Data Analyst
Litigation
Andy Garcia N/A Technology $280 3.0 $840.00
Data Analyst
Litigation
Daniel Valentino N/A Technology $280 1.5 $420.00
Data Analyst
Total 470.2 $631,624.00
Less 15% Client Accommodation3 $94,743.60
ADJUSTED TOTAL $536,880.40
Blended Rate: $1,141.814
3
As an accommodation to the Committee, McDermott has agreed to discount the amount of its monthly invoices
by an amount equal to 15% of the aggregate fees requested in each such invoice.
4
The blended rate was calculated by dividing the adjusted total fees sought by the aggregate number of hours
worked by McDermott Professionals.
iv
Case 24-11217-BLS Doc 592 Filed 10/01/24 Page 5 of 16
OFFICIAL COMMITTEE OF UNSECURED
CREDITORS OF VYAIRE MEDICAL, INC., ET AL.
SUMMARY OF FEES BY PROJECT CATEGORY
AUGUST 1, 2024 THROUGH AUGUST 31, 2024
Project Category Total Hours Total Fees
Case Administration 10.2 $8,067.50
Asset Disposition 145.5 $209,060.50
Meetings and Communications with Creditors 39.1 $52,473.00
Court Hearings 60.6 $87,421.50
Fee and Employment Applications 14.9 $23,051.50
Contested and Litigation-Related Matters 183.5 $226,169.00
Non-Working Travel 3.2 $5,600.00
Financing/Cash Collateral 12.7 $18,906.00
Plan/Disclosure Statement 0.5 $875.00
Total 470.2 $631,624.00
Less 15% Client Accommodation5 $94,743.60
ADJUSTED TOTAL $536,880.40
5
As an accommodation to the Committee, McDermott has agreed to discount the amount of its monthly invoices
by an amount equal to 15% of the aggregate fees requested in each such invoice.
v
Case 24-11217-BLS Doc 592 Filed 10/01/24 Page 6 of 16
OFFICIAL COMMITTEE OF UNSECURED
CREDITORS OF VYAIRE MEDICAL, INC., ET AL.
SUMMARY OF EXPENSES
AUGUST 1, 2024 THROUGH AUGUST 31, 2024
Service Provider
Expense Category Total Expenses
(if applicable)
Outside Service Reliable $910.65
Court Filing Fees $100.00
Transportation Various $654.04
TOTAL $1,664.69
vi
Case 24-11217-BLS Doc 592 Filed 10/01/24 Page 7 of 16
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
) Chapter 11
In re: )
) Case No. 24-11217 (BLS)
VYAIRE MEDICAL, INC., et al.,1 )
) (Jointly Administered)
Debtors. )
) Obj. Deadline: 10/22/24 at 4:00 p.m. (ET)
) Hrg. Date: Only if an objection is filed
SECOND MONTHLY FEE APPLICATION OF MCDERMOTT
WILL & EMERY LLP, COUNSEL TO THE OFFICIAL COMMITTEE OF
UNSECURED CREDITORS, FOR ALLOWANCE OF COMPENSATION
AND REIMBURSEMENT OF EXPENSES FOR THE PERIOD
FROM AUGUST 1, 2024 THROUGH AUGUST 31, 2024
McDermott Will & Emery LLP (the “Applicant” or “McDermott”), counsel to the
Official Committee of Unsecured Creditors (the “Committee”) of Vyaire Medical, Inc., et al., the
debtors and debtors in possession (collectively, the “Debtors”) in the above-captioned chapter 11
cases (the “Chapter 11 Cases”), hereby applies (the “Application”), pursuant to sections 330 and
331 of title 11 of the United States Code, 11 U.S.C. §§ 101-1532 (the “Bankruptcy Code”), Rule
2016 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), and 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”), for allowance of compensation for services
rendered and expenses incurred for the period from August 1, 2024 through August 31, 2024 (the
“Application Period”), and respectfully represents as follows:
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 592 Filed 10/01/24 Page 8 of 16
JURISDICTION AND VENUE
1. The Court has jurisdiction to consider the Application pursuant to 28 U.S.C.
§§ 157 and 1334 and the Amended Standing Order of Reference from the United States District
Court for the District of Delaware, dated February 29, 2012. This is a core proceeding under
28 U.S.C. § 157(b). Venue of these cases and the Application in this District is proper under
28 U.S.C. §§ 1408 and 1409.
2. The legal predicates for the relief requested herein are Bankruptcy Code sections
330 and 331, Bankruptcy Rule 2016, and Local Rule 2016-2.
3. McDermott confirms its consent, pursuant to Local Rule 9013-1(f), to the entry of
a final order by the Court in connection with the Application in the event that it is later
determined that the Court, absent consent of the parties, cannot enter final orders or judgments in
connection herewith consistent with Article III of the United States Constitution.
BACKGROUND
A. The Chapter 11 Cases
4. On June 9, 2024 (the “Petition Date”), the Debtors commenced the Chapter 11
Cases by filing petitions for relief under chapter 11 of the Bankruptcy Code with the Court. The
Debtors continue to operate their business and manage their properties as debtors and debtors in
possession under sections 1107(a) and 1108 of the Bankruptcy Code. No trustee or examiner has
been appointed in the Chapter 11 Cases.
5. On June 26, 2024, the Office of the United States Trustee for the District of
Delaware (the “U.S. Trustee”) appointed the Committee under section 1102(a)(1) of the
Bankruptcy Code. See Docket No. 121.
2
Case 24-11217-BLS Doc 592 Filed 10/01/24 Page 9 of 16
B. The Committee’s Retention of McDermott
6. On July 9, 2024, the Committee applied [Docket Nos. 215] to the Court for an
order authorizing the Committee to retain and employ McDermott as its counsel, effective as of
June 28, 2024. On July 30, 2024, the Court entered an order [Docket No. 336] authorizing such
retention.
C. The Interim Compensation Order
7. On July 9, 2024, the 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 “Interim Compensation Order”),2 which sets
forth the procedures for interim compensation and reimbursement of expenses in the Chapter 11
Cases. Specifically, the Interim Compensation Order provides that a retained professional may
file and serve a Monthly Fee Statement on or after the twenty-first (21st) day of each month
following the month for which compensation is sought. Provided that there are no objections to
the Monthly Fee Statement filed within twenty-one (21) days after the service of a Monthly Fee
Statement, the professional may file a certificate of no objection with the Court, after which the
Debtors are authorized to pay such professional eighty percent (80%) of the fees and one-
hundred percent (100%) of the expenses requested in such Monthly Fee Statement.
RELIEF REQUESTED
8. By this Application, McDermott requests the allowance of $429,504.32, which is
equal to eighty percent (80%) of the $536,880.40 in fees for professional services rendered by
2
Capitalized terms used but not defined herein shall have the meanings ascribed to such items in the Interim
Compensation Order.
3
Case 24-11217-BLS Doc 592 Filed 10/01/24 Page 10 of 16
McDermott during the Application Period.3 McDermott also requests reimbursement of
$1,664.69 in expenses incurred during the Application Period in connection with its engagement
by the Committee.
DESCRIPTION OF SERVICES RENDERED
9. During the Application Period, McDermott professionals, including attorneys and
paraprofessionals (collectively, the “McDermott Professionals”), devoted 470.2 hours to, among
other things, contested and litigation-related matters, sale matters, preparation for and attendance
at Court hearings, communications with the Committee and other creditors, preparation of
professional fee applications, financing and use of cash collateral, and case administration
matters. McDermott Professionals’ most significant work in these matter categories is
summarized below, and all work performed by McDermott Professionals is described in detail in
Exhibit A hereto, which provides a detailed itemization, by project category, of all services
performed by McDermott Professionals with respect to the Chapter 11 Cases during the
Application Period. This detailed itemization complies with Local Rule 2016-2(d) in that each
time entry contains a separate time allotment, a description of the type of activity, and the subject
matter of the activity, all time is billed in increments of one-tenth of an hour, time entries are
presented chronologically in categories, and all meetings or hearings are individually identified.
A. Contested and Litigation-Related Matters
Amount Sought: $ 226,169.00
10. During the Application Period, McDermott Professionals continued the
Committee’s investigation into potential causes of action against the Debtors’ directors and
officers and lender parties. Among other things, McDermott Professionals (i) provided multiple
3
These figures reflect a 15% voluntary fee reduction provided by McDermott to the Committee as a client
accommodation.
4
Case 24-11217-BLS Doc 592 Filed 10/01/24 Page 11 of 16
discovery requests to the Debtors and lender parties, (ii) met and conferred with the discovery
parties as appropriate to better coordinate production of discovery, (iii) reviewed materials
produced in connection with the discovery requests, (iv) met with Cole Schotz, LLP (“Cole
Schotz”) to discuss the results of Cole Schotz’s investigation, and (v) coordinated with the
Committee’s other professionals regarding the ongoing investigation.
11. McDermott Professionals devoted a total of 183.5 hours to contested and
litigation-related matters during the Application Period, for which compensation in the amount
of 226,169.00 is sought.
B. Asset Disposition
Amount Sought: $209,060.50
12. During the Application Period, McDermott Professionals devoted substantial time
to the sale of the Debtors’ assets through the auction that took place during the week of
August 12, 2024 (the “Auction”). McDermott Professionals reviewed and analyzed the proposed
bids submitted by prospective buyers, and then attended and monitored the Auction. Following
the Auction, McDermott Professionals met with the Debtors’ professionals to discuss the
finalized asset purchase agreements and expressed concerns about certain terms of the proposed
sale orders. As a result, McDermott Professionals ultimately prepared and filed both a
reservation of rights [Docket No. 437] and a supplemental reservation of rights and limited
objection [Docket No. 480] (the “Sale Order Objection”).
13. McDermott Professionals devoted a total of 145.5 hours to sale matters during the
Application Period, for which compensation in the amount of $209,060.50 is sought.
C. Court Hearings
Amount Sought: $87,421.50
14. During the Application Period, McDermott Professionals prepared for and
attended the August 26, 2024 and August 30, 2024 hearings. Significant preparation was needed
5
Case 24-11217-BLS Doc 592 Filed 10/01/24 Page 12 of 16
for these hearings in order for McDermott Professionals to prosecute the Committee’s Sale Order
Objection, with such preparation including meetings with parties in interest, review of the
evidence, and preparation for cross examination of a witness at the August 30, 2024 hearing.
15. McDermott Professionals devoted a total of 60.6 hours to preparation for and
attendance at Court hearings during the Application Period, for which compensation in the
amount of $87,421.50 is sought.
D. Meetings and Communications with Creditors
Amount Sought: $52,473.00
16. During the Application Period, McDermott Professionals prepared for and
conducted regular Committee meetings and communicated with the Committee members and
their counsel both as a group and on an individual basis. Among other things, McDermott
Professionals provided recommendations to the Committee regarding various requests of the
Debtors and other parties in interest, counseled the Committee in connection with the
Committee’s responses to the Debtors’ pleadings, and delivered email updates regarding case
updates and various outstanding matters. McDermott Professionals also coordinated with the
Committee’s financial advisor to prepare for weekly Committee calls by preparing, discussing,
and reviewing Committee presentations on topics such as the Debtors’ operations and finances
and case strategy.
17. McDermott Professionals devoted a total of 39.1 hours to communications with
the Committee and other creditors (and related tasks) during the Application Period, for which
compensation in the amount of $52,473.00 is sought.
E. Fee and Employment Applications
Amount Sought: $23,051.50
18. During the Application Period, McDermott Professionals began to draft and
revise McDermott’s first monthly fee application.
6
Case 24-11217-BLS Doc 592 Filed 10/01/24 Page 13 of 16
19. McDermott Professionals devoted a total of 14.9 hours to the preparation of
professional fee and retention applications during the Application Period, for which
compensation in the amount of $23,051.50 is sought.
F. Financing/Cash Collateral
Amount Sought: $18,906.00
20. During the Application Period, McDermott Professionals continued their lien
perfection analysis and the preparation of a related memorandum. McDermott Professionals also
reviewed and analyzed the Debtors’ financial reporting and liquidity updates provided by the
Committee’s other professionals.
21. McDermott Professionals devoted a total of 12.7 hours to cash collateral and
financing matters during the Application Period, for which compensation in the amount of
$18,906.00 is sought.
G. Case Administration
Amount Sought: $8,067.50
22. During the Application Period, McDermott Professionals devoted time to, among
other things: (i) monitoring the Court’s docket for case updates and deadlines; (ii) preparing for
and participating in conferences with case professionals; and (iii) corresponding with the
Debtors, the Committee, and other parties in interest regarding case status, pending motions, and
case administration issues.
23. McDermott Professionals devoted a total of 10.2 hours to case administration
matters during the Application Period, for which compensation in the amount of $8,067.50 is
sought.
7
Case 24-11217-BLS Doc 592 Filed 10/01/24 Page 14 of 16
DESCRIPTION OF ACTUAL, REASONABLE,
AND NECESSARY EXPENSES INCURRED
24. During the Application Period, McDermott incurred actual, reasonable, and
necessary expenses in connection with its engagement by the Committee in the aggregate
amount of $1,664.69, for which McDermott seeks reimbursement. Attached hereto as Exhibit B
are descriptions of the expenses actually incurred by McDermott in the performance of services
rendered as counsel to the Committee. The expenses are broken down into categories of charges,
including, among other things, the following charges: travel expenses, business meals, service
and hearing binder expenses, and certain other non-ordinary expenses.4
VALUATION OF SERVICES
25. McDermott Professionals have expended a total of 470.2 hours in connection with
this matter during the Application Period. The amount of time spent by each of the McDermott
Professionals providing services to the Committee during the Application Period is set forth in
Exhibit A. The rates reflected in this Application are McDermott’s normal hourly rates of
compensation for work of this character. The reasonable value of the services rendered by
McDermott during the Application Period as counsel for the Committee in the Chapter 11 Cases
is $536,880.40.5
26. In accordance with the factors enumerated in Bankruptcy Code section 330,
McDermott submits that the amount requested is fair and reasonable given (a) the complexity of
the Chapter 11 Cases, (b) the time expended, (c) the nature and extent of the services rendered,
4
In accordance with Del. Bankr. L.R. 2016-2(e)(iii), McDermott does not charge more than $0.10 per page for
photocopies, does not charge for incoming facsimile transmissions, and does not charge more than $0.25 per
page for outgoing facsimiles.
5
This figure reflects a 15% voluntary fee reduction provided by McDermott to the Committee as a client
accommodation.
8
Case 24-11217-BLS Doc 592 Filed 10/01/24 Page 15 of 16
(d) the value of such services, and (e) the costs of comparable services other than in a case under
the Bankruptcy Code.
NO PRIOR REQUEST
27. No prior request for the relief requested in this Application has been made to this
Court or any other court.
CERTIFICATE OF COMPLIANCE AND REQUEST FOR WAIVER
28. The undersigned representative of McDermott certifies that he has reviewed the
requirements of Local Rule 2016-2 and that the Application substantially complies with that
Local Rule. To the extent that the Application does not comply in all respects with the
requirements of Local Rule 2016-2, McDermott believes that such deviations are not material
and respectfully requests that any such requirement be waived.
[Remainder of Page Intentionally Left Blank]
9
Case 24-11217-BLS Doc 592 Filed 10/01/24 Page 16 of 16
WHEREFORE, McDermott respectfully requests that it (a) be allowed (i) compensation
in the amount of $429,504.32 (80% of the $536,880.40) for necessary professional services
rendered to the Committee during the Application Period, and (ii) reimbursement of actual and
necessary expenses in the amount of $1,664.69 incurred during that period, and (b) be granted
such other and further relief as the Court deems just and proper.
Dated: Wilmington, Delaware MCDERMOTT WILL & EMERY LLP
October 1, 2024
/s/ David R. Hurst
David R. Hurst (I.D. No. 3743)
Maris J. Kandestin (I.D. No. 5294)
The Brandywine Building
1000 N. West Street, Suite 1400
Wilmington, Delaware 19801
(302) 485-3900
dhurst@mwe.com
mkandestin@mwe.com
- and -
Darren Azman
Kristin K. Going
One Vanderbilt Avenue
New York, New York 10017
(212) 547-5400
dazman@mwe.com
kgoing@mwe.com
Counsel for the Official Committee
of Unsecured Creditors
10
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