Vyaire - ProSymmetry Cure Reservation 4853-7458-8657 v.3
- Date
- 2024-10-28
Summary
A reservation of rights by ProSymmetry LLC to the proposed cure amount, filed October 28, 2024 as Doc 687 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. ProSymmetry states that the Supplemental Cure Notice listed a cure amount of $52,616.40 under its Software Subscription Agreement with the debtor, and that the court's Sale Order approving the Trudell asset sale was entered September 4, 2024 but the sale had not closed. It states that the agreement automatically renews on November 9, 2024, with an annual payment of $54,194.89, so the cure amount may rise to $106,811.29. Citing 11 U.S.C. § 365(b)(1), ProSymmetry reserves its right to object to assumption and assignment of the agreement unless the full cure amount is paid.
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Case 24-11217-BLS Doc 687 Filed 10/28/24 Page 1 of 7
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
____________________________________
In re: )
) Chapter 11
)
VYAIRE MEDICAL, INC., et al.1 ) Case No. 24-11217 (BLS)
)
Debtors. ) (Jointly Administered)
)
____________________________________) Related Docket No. 256, 462, 497
RESERVATION OF RIGHTS OF
PROSYMMETRY LLC TO PROPOSED CURE AMOUNT
ProSymmetry LLC (“ProSymmetry”), by and through its undersigned counsel, hereby
files this reservation of rights (the “Reservation of Rights”) with respect to the First Notice to
Contract Counterparties of Potentially Assumed and Assigned Executory Contracts and
Unexpired Leases (Dkt. No. 256, the “First Cure Notice”), the First Supplemental Notice to
Contract Counterparties of Potentially Assumed and Assigned Executory Contracts and
Unexpired Leases (Dkt. No. 462, the “Supplemental Cure Notice”), and the Order (I) Approving
the Trudell Asset Purchase Agreement and Authorizing the Sale of Certain Respiratory
Diagnostics Assets of the Debtors Outside the Ordinary Course of Business, (II) Authorizing the
Sale of Assets Free and Clear of All Liens, Claims, Interests, and Encumbrances, (III)
Authorizing the Assumption and Assignment of Executory Contracts and Unexpired Leases In
Connection Therewith, and (IV) Granting Related Relief (Dkt. No. 497, the “Sale Order”).2 In
support of this Reservation of Rights, ProSymmetry states 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.
2
Capitalized terms that not defined herein have the meanings in the Sale Order.
Case 24-11217-BLS Doc 687 Filed 10/28/24 Page 2 of 7
BACKGROUND
1. On June 9, 2024, (the “Petition Date”), each of the above-captioned debtors (the
“Debtors”) filed a voluntary petition for relief pursuant to Chapter 11 of the Bankruptcy Code.
2. Prior to the Petition Date, ProSymmetry and the Debtor Vyaire Medical, Inc. (the
“Debtor”) entered into that certain Software Subscription Agreement dated December 4, 2023
(the “ProSymmetry Agreement”) pursuant to which ProSymmetry agreed to provide software
services to the Debtor.
3. On July 11, 2024, the Court entered its 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 (Dkt. No. 249, the “Bid
Procedures Order”).
4. On August 1, 2024, ProSymmetry filed a proof of claim asserting a claim against
the Debtor in an amount of not less than $52,616.40 for amounts then due and owing under the
ProSymmetry Agreement.
5. On August 24, 2024, the Debtors filed the Supplemental Cure Notice, which
reflected a cure amount of $52,616.40 (the “Original Cure Amount”) for ProSymmetry 2023-12-
04 Order Form—which Order Form expressly incorporates the ProSymmetry Agreement.3 See
3
The Order Form contains confidential information but can be provided upon request, although ProSymmetry
believes that the Debtors have a copy of the Order Form
2
Case 24-11217-BLS Doc 687 Filed 10/28/24 Page 3 of 7
Supplemental Cure Notice at 3.4 Prior to the filing of the Supplemental Cure Notice,
ProSymmetry and the Debtors discussed the correct cure amount and agreed that the Original
Cure Amount reflected the current defaulted amounts under the ProSymmetry Agreement as of
the date that the Supplemental Cure Notice was filed.
6. On September 4, 2024, the Court entered the Sale Order approving the Sale
Transaction. See Dkt. No. 497.
7. The Sale Order provides that the Cure Amounts (as defined in the Supplemental
Cure Notice) “shall be satisfied by the Purchaser in accordance with the terms of the Trudell
APA.” See Sale Order, ¶ RR.
8. The Sale Order also provides that any non-debtor counterparty to an Assumed
Contract that has failed to timely object to a proposed Cure Amount “shall be prohibited from
challenging, objecting to, or denying the validity and finality of the Cure Amount [as listed in the
Supplemental Cure Notice]”. See Sale Order, ¶ UU.
9. Despite entrance of the Sale Order on September 4, 2024, as of October 25, 2024,
the Sale Transaction approved in the Sale Order has yet to be consummated.
10. Per the terms of the ProSymmetry Agreement, the Agreement will automatically
renew as of November 9, 2024, with an annual payment of $54,194.89 due thereafter.
Specifically, paragraph 2 of the ProSymmetry Agreement provides “[e]xcept as otherwise
expressly provided in an Order, each Order will have a one (1) year term and will automatically
renew on an annual basis, unless either Party provides at least thirty (30) days’ advance notice of
non-renewal.” See ProSymmetry Agreement, https://www.prosymmetry.com/software-terms-
and-conditions. The Debtor did not provide the requisite 30 days’ notice of non-renewal of the
4
The First Cure Notice also listed two ProSymmetry agreements with the Debtors with zero cure amounts—
“ProSymmetry LLC 2020‐07‐20 CDA (Vyaire signed)” and “Prosymmetry 2021‐11‐09 Order Form” See First Cure
Notice at 151. ProSymmetry does not object to these cure amounts.
3
Case 24-11217-BLS Doc 687 Filed 10/28/24 Page 4 of 7
ProSymmetry Agreement; therefore, the ProSymmetry Agreement will automatically renew for
another year.5
11. Because the ProSymmetry Agreement will automatically renew on November 9,
2024—and the Sale Transaction has not yet closed—the Original Cure Amount set forth in the
Supplemental Cure Notice may fail to accurately reflect the total balance owing to ProSymmetry
by the Debtor under the ProSymmetry Agreement at the time of the closing of the Sale
Transaction. As such, if the Sale Transaction closes after the renewal term invoice comes due
(currently estimated to be December 9, 2024), then the amount by which the Debtor will be in
default under the ProSymmetry Agreement will be not less than $106,811.29 (the “Cure
Amount”).
12. Although the Supplemental Cure Notice had an objection deadline of September
7, 2024,6 ProSymmetry did not file a cure objection prior to such deadline because ProSymmetry
(i) agreed with the Original Cure Amount as listed in the Supplemental Cure Notice as of the
date the Notice was filed; and (ii) through its counsel had informally objected to the Sale Order
capping the Original Cure Amount if additional post-petition amounts accrued during the period
between entry of the Sale Order and closing of the Sale Transaction. See Exhibit A, August
2024 Emails between ProSymmetry counsel and Debtors’ counsel. Now the exact situation
raised by ProSymmetry’s counsel has occurred, and, as a result, depending on the timing of the
closing of the Sale Transaction, the Original Cure Amount may increase to the full Cure Amount
of $106,811.29—reflecting all amounts due and owing to ProSymmetry by the Debtor under the
5
Notice of non-renewal pursuant to paragraph 2 of the ProSymmetry Agreement was not received by ProSymmetry
on or before October 10, 2024—30 days prior to the automatic renewal date—therefore, the Debtor is bound to the
renewal term.
6
The Supplemental Cure Notice provided that cure objections to New Potentially Assumed and Assigned Contracts
was “the later of (a) September 6, 2024 or (b) the date that is 14 calendar days after service of this notice . . . .”
Supplemental Cure Notice at 2. The Supplemental Cure Notice was filed and served on August 24, 2024; therefore,
14 calendar days later is September 7, 2024.
4
Case 24-11217-BLS Doc 687 Filed 10/28/24 Page 5 of 7
ProSymmetry Agreement as of the Sale Transaction closing date—should the Debtor want to
assume and assign the ProSymmetry Agreement to the Seller under the Trudell APA.
RESERVATION OF RIGHTS
13. Section 365 of the Bankruptcy Code provides in pertinent part:
(b)(1) If there has been a default in an executory contract or
unexpired lease of the debtor, the trustee may not assume such
contract or lease unless, at the time of assumption of such contract
or lease the trustee –
(A) cures, or provides adequate assurance that the trustee
will promptly cure, such default . . . .
11 U.S.C. § 365(b)(1) (emphasis added).
14. Currently, the Debtor owes to ProSymmetry the Original Cure Amount in the
amount of $52,616.40, accounting for pre-petition services rendered to the Debtor under the
ProSymmetry Agreement. The Original Cure Amount, however, will soon increase to reflect the
full Cure Amount of $106,811.29 in connection with the November 9, 2024 automatic renewal
of the ProSymmetry Agreement following entrance of the Sale Order.
15. If the Debtor intends to assume and assign the ProSymmetry Agreement to the
Purchaser in accordance with the terms of the Sale Transaction, the plain language of
Bankruptcy Code Section 365(b)(1)(A) requires the Debtors to pay (or provide adequate
assurance that they will promptly pay) all defaulted amounts due and owing under the executory
contract, including all amounts that may accrue through the date of any sale closing and contract
assumption or assignment.
16. The Original Cure Amount of $52,616.40 represents all amounts currently due
and owing to ProSymmetry by the Debtor under the ProSymmetry Agreement as of the date
hereof. While not yet due and owing at this time, the Original Cure Amount will increase to the
Cure Amount of $106,811.29 in the coming weeks. ProSymmetry files this Reservation of
5
Case 24-11217-BLS Doc 687 Filed 10/28/24 Page 6 of 7
Rights to make clear that, if the Sale Transaction closes following renewal of the ProSymmetry
Agreement and the ProSymmetry Agreement is assumed and assigned to the Seller, the full Cure
Amount must be paid at the time of assumption and assignment or must otherwise be paid in full
as an administrative expense claim for ongoing services rendered during these Chapter 11 cases.
17. ProSymmetry expressly reserves the right to amend or supplement this
Reservation of Rights and the Cure Amount should any additional amounts become due and
owing under the ProSymmetry Agreement prior to the closing of the Sale Transaction, thereby
further increasing the Cure Amount. ProSymmetry also reserves the right to seek allowance and
payment of administrative claims for amounts coming due post-petition under the ProSymmetry
Agreement.7
7
Despite ProSymmetry holding an administrative claim for amounts that became due and owing as a result of the
ProSymmetry Agreement’s automatic renewal, the existence of such administrative claim does not reduce the Cure
Amount owed to ProSymmetry if the ProSymmetry Agreement is assumed and assigned to the Purchaser while the
renewal term invoice is in default.
6
Case 24-11217-BLS Doc 687 Filed 10/28/24 Page 7 of 7
WHEREFORE, based on the foregoing, ProSymmetry reserves its right to object to the
assumption and assignment of the ProSymmetry Agreement to the Purchaser under the Trudell
APA following renewal of the ProSymmetry Agreement, to the extent the full Cure Amount of
$106,811.29 is due and owing at the time that the Sale Transaction closes but not timely paid to
ProSymmetry in accordance with Bankruptcy Code section 365.
Dated: October 28, 2024 WOMBLE BOND DICKINSON (US) LLP
Wilmington, Delaware
/s/ Morgan L. Patterson
Morgan L. Patterson (Bar No. 5388)
Marcy J. McLaughlin Smith (Bar No. 6184)
1313 North Market Street, Suite 1200
Wilmington, Delaware 19801
Telephone: (302) 252-4320
Facsimile: (302) 252-4330
Email: morgan.patterson@wbd-us.com
Email: marcy.smith@wbd-us.com
Counsel to ProSymmetry LLC
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