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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)
)
)
Hearing Date: Only if Objections are filed
)
Objection Deadline: November 1, 2024, at 4:00 p.m. (ET)
FEE APPLICATION OF PJT PARTNERS LP
AS INVESTMENT BANKER TO THE DEBTORS AND
DEBTORS IN POSSESSION FOR ALLOWANCE OF RESTRUCTURING FEE
SUMMARY SHEET
Name of Applicant:
PJT Partners LP
Authorized to Provide
Professional Services to:
Debtors
Date of Retention:
Order entered on July 30, 2024 approving
theretention of PJT Partners LP effective as of
June 9, 2024 [Docket No. 335]
Amount of Compensation sought
As Actual, Reasonable, and Necessary:
$7,000,000.00
Amount of Cash Payment Sought:
$5,180,000.00
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 622 Filed 10/11/24 Page 1 of 9
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)
)
)
Hearing Date: Only if Objections are filed
)
Objection Deadline: November 1, 2024, at 4:00 p.m. (ET)
FEE APPLICATION OF PJT PARTNERS LP
AS INVESTMENT BANKER TO THE DEBTORS AND
DEBTORS IN POSSESSION FOR ALLOWANCE OF RESTRUCTURING FEE
PJT Partners LP (“PJT”), investment banker to the above-captioned debtors and
debtors-in-possession (collectively, the “Debtors”) respectfully represents as follows:
Background
1. On June 9, 2024 (the “Petition Date”), the Debtors filed a voluntary petition for
relief under chapter 11 of title 11 of the United States Code, 11 U.S.C. §§ 101 et seq., as amended
(the “Bankruptcy Code”). The Debtors are operating their businesses and managing their
properties as debtors-in-possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code.
2. On July 9, 2024, this 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 “Procedures Order”) establishing procedures for
interim compensation and reimbursement of expenses for professionals.
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 622 Filed 10/11/24 Page 2 of 9
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3. On July 9, 2024, the Debtors filed the Application of Debtors for Entry of An Order
(I) Authorizing the Retention and Employment of PJT Partners LP as Investment Banker to the
Debtors and Debtors In Possession Effective as of the Petition Date, (II) Waiving Certain
Information Requirements Pursuant to Local Rule 2016-2, and (II) Granting Related Relief
[Docket No. 240] (the “Retention Application”), pursuant to which the Debtors sought authority
to employ and retain PJT as their investment banker pursuant to the terms of an engagement letter
(the “Engagement Letter”) dated April 25, 2024. A copy of the Engagement Letter was attached
to the Retention Application.
4. On July 30, 2024, this Court entered the Order (I) Authorizing the Retention and
Employment of PJT Partners LP as Investment Banker to the Debtors and Debtors in Possession
Effective as of the Petition Date, (II) Waiving Certain Information Requirements Pursuant to Local
Rule 2016-2, and (III) Granting Related Relief [Docket No. 335] (the “Retention Order”)
approving the Retention Application and authorizing the employment and retention of PJT
effective as of the Petition Date, pursuant to the terms of the Engagement Letter. The Retention
Order provides, in pertinent part, as follows:
“PJT shall be entitled to seek interim allowance and payment of any
Capital Raising Fee and Restructuring Fee by filing and serving an
application in respect of each Capital Raising Fee and Restructuring
Fee immediately upon the consummation of such Capital Raise
and/or Restructuring in accordance with the ‘Monthly Fee
Application’ procedures set forth in [the Procedures Order] and in
accordance with the procedures set forth in the Bankruptcy Code,
the Bankruptcy Rules, and the Local Rules.”
5. In accordance with the Retention Order and the Procedures Order, PJT submits this
fee application (the “Fee Application”) requesting the allowance of PJT’s Restructuring Fee (as
defined below) earned for investment banking services rendered to the Debtors.
6. Investment banking services for which compensation is being sought were rendered
or incurred on behalf of the Debtors pursuant to chapter 11 of the Bankruptcy Code.
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The PJT Engagement
7. Pursuant to the Engagement Letter, PJT was retained to provide the following
services to the Debtors:2
(a) assist in the evaluation of the Debtors’ businesses and prospects;
(b) assist in the development of the Debtors’ long-term business plan and related
financial projections;
(c) assist in the development of financial data and presentations to the Debtors’ board
of directors, various creditors and/or third parties;
(d) analyze the Debtors’ financial liquidity and evaluate alternatives to improve such
liquidity;
(e) analyze various Restructuring scenarios and the potential impact of these scenarios
on the recoveries of those stakeholders impacted by the Restructuring;
(f) provide strategic advice with regard to restructuring or refinancing the Debtors’
Obligations;
(g) evaluate the Debtors’ debt capacity and alternative capital structures;
(h) participate in negotiations among the Debtors and their creditors, suppliers, lessors,
and other interested parties and/or potential financing parties;
(i) value securities offered by the Debtors in connection with a Restructuring;
(j) provide financial and valuation advice and assistance to the Debtors in developing
and seeking approval of an in-court Restructuring (including a Chapter 11 plan);
(k) advise the Debtors and negotiate with lenders with respect to potential waivers or
amendments of various credit facilities;
(l) assist in arranging financing for the Debtors, as requested;
(m)provide expert witness testimony concerning any of the subjects encompassed by
the other investment banking services; and
(n) provide such other advisory services as are customarily provided in connection with
the analysis and negotiation of a transaction similar to a potential Restructuring
and/or Capital Raise, as requested and mutually agreed.
2 Capitalized terms used but not defined herein shall have the meanings provided thereto in the Engagement Letter.
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8. Pursuant to the Engagement Letter, as approved by the Retention Order, the
Debtors agreed to pay PJT as follows in consideration for the services rendered:3
(a) Monthly Fee: The Debtors shall pay a monthly advisory fee (the “Monthly Fee”)
in the amount of $175,000. Fifty percent (50%) of the first $1,050,000 in Monthly
Fees paid to PJT under the Engagement Letter and/or the Prior Letter shall be
credited, once and without duplication, against any Restructuring and/or Capital
Raising Fee, up to a maximum total aggregate credit against all such fees equal to
$525,000.
(b) Capital Raising Fee: The Debtors shall pay a capital raising fee (the “Capital
Raising Fee”) for any Capital Raise, earned and payable upon the earlier of the
receipt of a binding commitment letter and the closing of such Capital Raise. If
access to the financing is limited by orders of the bankruptcy court, a proportionate
fee shall be payable with respect to each available commitment (irrespective of
availability blocks, borrowing base, or other similar restrictions). The Capital
Raising Fee will be calculated as:
Senior Debt (other than Structured Financing): One-and-a-half percent
(1.5%) of the total issuance and/or committed amount of senior debt financing,
excluding senior debt financing that is or may (or is anticipated in the future to)
constitute a Structured Financing,
Junior Debt (and Structured Financing): Three-percent (3.0%) of the total
issuance and/or committed amount of (A) Structured Financing, (B) junior debt
financing, or (C) unsecured debt financing (including, without limitation,
financing that is junior in right of payment, second lien, subordinated
(structurally or otherwise) and unsecured debt), and
Equity Financing: Five-percent (5.0%) of the issuance and/or committed
amount of equity financing,
in each case, including by means of a back-stop commitment; provided that, (x) the
minimum Capital Raise Fee in respect of any Capital Raise shall be $750,000, and
(y) if any portion of the debt or equity financing is raised from Apax Partners, LLP
or its affiliates (collectively, the “Sponsor”), then PJT Partners shall be entitled to
receive 50% of the Capital Raising Fee (the “Sponsor Capital Raising Fee”) to
which it otherwise would have been entitled in respect of any debt or equity
financing raised from the Sponsor.
(c) Restructuring Fee: The Debtors shall pay a fee in respect of a Restructuring (the
“Restructuring Fee”) equal to $7,000,000, earned and payable upon the
consummation of a Restructuring. As used in the Engagement Letter, the term
3 This description of PJT’s compensation structure is for summary and illustrative purposes only. The terms of the
Engagement Letter, as modified and approved by the Retention Order, shall apply to any such compensation awarded
to PJT.
Case 24-11217-BLS Doc 622 Filed 10/11/24 Page 5 of 9
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“Restructuring” means “(i) any restructuring, reorganization (whether or not
pursuant to chapter 11 of the United States Bankruptcy Code (“Chapter 11”))
and/or recapitalization of the [Debtors] affecting a material portion of [their]
existing debt obligations or other claims against the [Debtors], including, without
limitation, revolving credit facilities, term loans, any senior debt, junior debt, notes,
trade claims, general unsecured claims (collectively, the “Obligations”), and/or (ii)
a sale or other acquisition or disposition of a material portion of the assets and/or
equity of the [Debtors], and/or (iii) any complete or partial repurchase, refinancing,
extension or repayment by the [Debtors] of a material portion of the Obligations.”
(d) Expense Reimbursements: In addition to the fees described above, the Debtors
agree to reimburse PJT for all reasonable and documented out-of-pocket expenses
incurred during PJT’s engagement, including, but not limited to, travel and lodging,
direct identifiable data processing, document production, publishing services and
communication charges, courier services, working meals, reasonable and
documented fees and expenses of PJT’s outside counsel (without the requirement
that the retention of such counsel be approved by the court in any bankruptcy case),
and other necessary expenditures, payable upon rendition of invoices setting forth
in reasonable detail the nature and amount of such expenses Further, in connection
with the reimbursement, contribution and indemnification provisions set forth in
the Engagement Letter and Attachment A to the Engagement Letter (the
“Indemnification Agreement”), which is incorporated therein by reference and
addressed further below, the Debtors agree to reimburse each PJT Party, for its legal
and other expenses (including the cost of any investigation and preparation) as they
are incurred in connection with any matter in any way relating to or referred to in
the Engagement Letter or arising out of the matters contemplated by the
Engagement Letter (including, without limitation, in enforcing the Engagement
Letter), subject to certain exceptions, limitations, and requirements set forth in the
Indemnification Agreement.
PJT’s Request for Payment of a Restructuring Fee
9. As set forth in the Engagement Letter, as approved by the Retention Order, PJT is
entitled to be paid the Restructuring Fee upon, among other things, the consummation of a “sale
or other acquisition or disposition of a material portion of the assets” of the Debtors. Pursuant to
the Order (I) Approving the Zoll Asset Purchase Agreement and Authorizing the Sale of Certain
Ventilation Assets of the Debtors Outside the Ordinary Couse 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 [Docket No. 496] dated September 04, 2024, this
Case 24-11217-BLS Doc 622 Filed 10/11/24 Page 6 of 9
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Court approved the sale of the Debtors’ Ventilation Assets (the “Sale”). The Sale was
consummated on [October 7, 2024]_where upon PJT became entitled to be paid the Restructuring
Fee in the amount of $7,000,000. In accordance with the Engagement Letter, PJT is required to
credit 50% of all Monthly Fees paid to PJT pursuant to the Engagement Letter and/or the Prior
Letter against the Restructuring Fee with the maximum amount of crediting against the
Restructuring Fee equal to $525,000 (the “Monthly Fee Credit”). Thus, the net Restructuring Fee
due to PJT is $6,475,000 (i.e., $7 million less $525,000). In accordance with the Retention Order
and the Procedures Order, PJT hereby requests payment of 80% of the net Restructuring Fee
calculated as follows:
Restructuring Fee
$7,000,000.00
Less: Monthly Fee Credit4
($525,000.00)
Net Restructuring Fee
$6,475,000.00
10. An invoice detailing the Restructuring Fee earned by PJT is attached hereto as
Appendix A.
11. PJT respectfully submits that the compensation requested for the services rendered
by PJT to the Debtors is fully justified and reasonable based upon (a) the complexity of the issues
presented, (b) the skill necessary to perform the financial advisory services properly, (c) the
preclusion of other employment, (d) the customary fees charged to clients in non-bankruptcy
situations for similar services rendered, (e) time constraints required by the exigencies of the case,
and (f) the experience, reputation and ability of the professionals rendering services.
12. PJT respectfully submits that the services it has rendered to the Debtors have been
necessary and in the best interests of the Debtors and the Debtors’ estate. PJT respectfully submits
4 Pursuant to the Engagement Letter and the Prior Letter, PJT earned Monthly Fees in the amount of $2,325,000 for
the period of April 13, 2023 (i.e., the effective date of the Prior Letter) through August 31, 2024. Pursuant to the
Engagement Letter, fifty percent (50%) of the first $1,050,000 in Monthly Fees paid to PJT under the Engagement
Letter and/or the Prior Letter shall be credited against any Restructuring Fee up to a maximum total aggregate credit
equal to $525,000.
Case 24-11217-BLS Doc 622 Filed 10/11/24 Page 7 of 9
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that under the criteria normally examined in chapter 11 reorganization cases, the compensation
requested by PJT is reasonable in light of the work performed by PJT during these chapter 11
cases.
13. All services for which PJT requests compensation were performed for and on behalf
of the Debtors and not on behalf of any other person or stakeholder.
14. No agreement or understanding exists between PJT and any other entity for the
sharing of compensation received or to be received for services rendered in or in connection with
this proceeding.
Certificate of Compliance and Waiver
15. Finally, the undersigned representative of PJT certifies that PJT has reviewed the
requirements of 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”) and that this Fee
Application substantially complies with that Local Rule. To the extent that this Fee Application
does not comply in all respects with the requirements of Local Rule 2016-2, PJT believes that such
deviations are not material and respectfully requests that any such requirement be waived.
Requested Relief
WHEREFORE, PJT requests that the Court:
(a) grant interim allowance of PJT’s net Restructuring Fee in the amount of
$6,475,000.00;
(b) authorize and direct the Debtors to pay PJT’s allowed and unpaid net Restructuring
Fee as follows:
Net Restructuring Fee
$6,475,000.00
Less: Holdback @ 20%
(1,295,000.00)
Amount Due PJT
$5,180,000.00
and
(c) grant such other and further relief as the Court deems just and proper.
Case 24-11217-BLS Doc 622 Filed 10/11/24 Page 8 of 9
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Dated: October 11, 2024
PJT Partners LP
Investment Banker to the Debtors
By: /s/ James H. Baird
James H. Baird III
Partner
280 Park Avenue
New York, NY 10017
(212) 364-7800
Case 24-11217-BLS Doc 622 Filed 10/11/24 Page 9 of 9