Full text
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4902-7637-9909v.1
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re:
VYAIRE MEDICAL, INC., et al.,1
Debtors
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Chapter 11
Case No. 24-11217 (BLS)
(Jointly Administered)
REAL STAFFING GROUP’S APPLICATION FOR
ALLOWANCE AND PAYMENT OF ADMINISTRATIVE EXPENSE CLAIM
Real Staffing Group, a trading division of Specialist Staffing Solutions, Inc. (“Real
Staffing”), files this Application for Allowance and Payment of Administrative Expense Claim (the
“Application”), in support of which Real Staffing further states as follows:
SUMMARY
1.
Real Staffing provided employees to Vyaire Medical, Inc. (“Vyaire”) under the
parties’ Master Staffing Agreement (as amended, the “MSA”). Post-petition invoices totaling
$183,012.71 remain unpaid. Real Staffing therefore requests allowance and payment of an
administrative expense claim under 11 U.S.C. § 503(b)(1)(A) in that amount.
JURISDICTION & VENUE
2.
This Court has jurisdiction of this Application under 28 U.S.C. §§ 157 and 1334.
This Application is a core proceeding under 28 U.S.C. §§ 157(b)(2). Venue in this Court is proper
under 28 U.S.C. § 1409. This Application is based on 11 U.S.C. § 503(b)(1).
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 884 Filed 12/23/24 Page 1 of 9
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BACKGROUND
3.
On June 9, 2024, (the “Petition Date”), the Debtors each filed a voluntary petition
for relief pursuant to chapter 11 of the Bankruptcy Code.
4.
Real Staffing and Vyaire are parties to the MSA, a copy of which is attached hereto
as Exhibit A. Under the MSA, Real Staffing provides staffing and personnel placement related
recruiting services to Vyaire. Neither party has terminated the MSA, and Real Staffing continued
to provide employees to Vyaire under the MSA after the Petition Date.
5.
On November 14, 2024, the Bankruptcy Court confirmed the Second Amended
Joint Chapter 11 Plan of Reorganization of Vyaire Medical, Inc. and Its Debtor Affiliates (Dkt.
No. 719, the “Plan”), which was attached as Exhibit A to the Findings of Fact, Conclusions of
Law, and Order Confirming the Second Amended Joint Chapter 11 Plan of Reorganization of
Vyaire Medical, Inc. and Its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code
(Dkt. No. 745, the “Confirmation Order”).
6.
On November 27, 2024, the Debtors filed their Notice of (I) Entry of Confirmation
Order, (II) Occurrence of Effective Date, and (III) Related Bar Dates (Dkt. No. 810), indicating
that the Effective Date2 the deadline for creditors to file requests for payment of Administrative
Claims under the Plan and Confirmation Order is December 27, 2024.
7.
The following invoices (the “Invoices”) for post-Petition Date services remain
unpaid as of the filing of this Application (copies of which are attached hereto as Exhibit B):
Invoice
Date
Due date
Service Period Grand Total
CI-1102-00048518
11-Jun-24
10-Aug-24
10-Jun-24
3,360.00
CI-1102-00052858
04-Jul-24
02-Sep-24
10-Jun-24
3,382.00
CI-1102-00052860
04-Jul-24
02-Sep-24
30-Jun-24
2,848.00
2 Capitalized terms not defined herein have the meaning attributed to them in the Plan and Confirmation Order.
Case 24-11217-BLS Doc 884 Filed 12/23/24 Page 2 of 9
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Invoice
Date
Due date
Service Period Grand Total
CI-1102-00052861
04-Jul-24
02-Sep-24
24-Jun-24
3,960.50
CI-1102-00052867
04-Jul-24
02-Sep-24
16-Jun-24
3,960.50
CI-1102-00053226
04-Jul-24
02-Sep-24
21-Jun-24
4,026.00
CI-1102-00053227
04-Jul-24
02-Sep-24
10-Jun-24
3,630.00
CI-1102-00053228
04-Jul-24
02-Sep-24
21-Jun-24
3,976.50
CI-1102-00053230
04-Jul-24
02-Sep-24
30-Jun-24
3,734.00
CI-1102-00053232
04-Jul-24
02-Sep-24
23-Jun-24
3,250.00
CI-1102-00054230
09-Jul-24
07-Sep-24
30-Jun-24
4,026.00
CI-1102-00054234
09-Jul-24
07-Sep-24
07-Jul-24
3,036.00
CI-1102-00054236
09-Jul-24
07-Sep-24
30-Jun-24
4,227.50
CI-1102-00054247
09-Jul-24
07-Sep-24
07-Jul-24
2,670.00
CI-1102-00054314
09-Jul-24
07-Sep-24
07-Jul-24
1,680.00
CI-1102-00054345
09-Jul-24
07-Sep-24
07-Jul-24
3,560.00
CI-1102-00055580
19-Jul-24
17-Sep-24
14-Jul-24
3,827.00
CI-1102-00055581
19-Jul-24
17-Sep-24
14-Jul-24
3,560.00
CI-1102-00055908
23-Jul-24
21-Sep-24
21-Jul-24
3,560.00
CI-1102-00056391
24-Jul-24
22-Sep-24
21-Jul-24
4,000.00
CI-1102-00056392
24-Jul-24
22-Sep-24
21-Jul-24
3,192.00
CI-1102-00056393
24-Jul-24
22-Sep-24
14-Jul-24
1,850.00
CI-1102-00057518
30-Jul-24
28-Sep-24
28-Jul-24
3,560.00
CI-1102-00057533
30-Jul-24
28-Sep-24
30-Jun-24
65.71
CI-1102-00057539
30-Jul-24
28-Sep-24
28-Jul-24
3,560.00
CI-1102-00057540
30-Jul-24
28-Sep-24
21-Jul-24
3,560.00
CI-1102-00057587
30-Jul-24
28-Sep-24
28-Jul-24
2,688.00
CI-1102-00057589
30-Jul-24
28-Sep-24
28-Jul-24
3,900.00
CI-1102-00059183 05-Aug-24
04-Oct-24
21-Jul-24
4,125.00
CI-1102-00059184 05-Aug-24
04-Oct-24
28-Jul-24
4,026.00
CI-1102-00059187 05-Aug-24
04-Oct-24
04-Aug-24
3,036.00
CI-1102-00059309 06-Aug-24
05-Oct-24
04-Aug-24
3,560.00
CI-1102-00059330 06-Aug-24
05-Oct-24
04-Aug-24
1,302.00
CI-1102-00059331 06-Aug-24
05-Oct-24
04-Aug-24
4,000.00
Case 24-11217-BLS Doc 884 Filed 12/23/24 Page 3 of 9
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Invoice
Date
Due date
Service Period Grand Total
CI-1102-00059333 06-Aug-24
05-Oct-24
04-Aug-24
672.00
CI-1102-00067015
09-Sep-24
08-Nov-24
01-Sep-24
2,268.00
CI-1102-00067085
09-Sep-24
08-Nov-24
08-Sep-24
2,136.00
CI-1102-00067187
10-Sep-24
09-Nov-24
11-Aug-24
2,640.00
CI-1102-00067752
10-Sep-24
09-Nov-24
08-Sep-24
3,560.00
CI-1102-00068617
16-Sep-24
15-Nov-24
15-Sep-24
3,560.00
CI-1102-00068618
16-Sep-24
15-Nov-24
25-Aug-24
5,478.00
CI-1102-00068685
16-Sep-24
15-Nov-24
15-Sep-24
6,400.00
CI-1102-00068701
16-Sep-24
15-Nov-24
15-Sep-24
3,560.00
CI-1102-00070640
23-Sep-24
22-Nov-24
22-Sep-24
3,560.00
CI-1102-00070724
23-Sep-24
22-Nov-24
22-Sep-24
3,560.00
CI-1102-00071179
24-Sep-24
23-Nov-24
22-Sep-24
4,000.00
CI-1102-00073042
30-Sep-24
29-Nov-24
29-Sep-24
4,272.00
CI-1102-00073676
01-Oct-24
30-Nov-24
29-Sep-24
4,000.00
CI-1102-00075531
07-Oct-24
06-Dec-24
06-Oct-24
4,272.00
CI-1102-00077858
14-Oct-24
13-Dec-24
13-Oct-24
6,408.00
CI-1102-00079265
21-Oct-24
20-Dec-24
20-Oct-24
3,560.00
CI-1102-00080910
29-Oct-24
28-Dec-24
08-Sep-24
3,560.00
CI-1102-00089392 29-Nov-24
28-Jan-25
08-Sep-24
2,848.00
183,012.71
8.
As the invoices illustrate, Real Staffing provided nine employees to Vyaire from
the Petition Date through November 2024, all of whom actually provided services to or on behalf
of Vyaire.
ARGUMENT AND AUTHORITIES
9.
Administrative expense claims arise under section 503 of the Bankruptcy Code,
which provides in relevant part as follows:
After notice and a hearing, there shall be allowed administrative expenses, other
than claims allowed under section 502(f) of this title, including—(1) (A)the actual,
necessary costs and expenses of preserving the estate ….
Case 24-11217-BLS Doc 884 Filed 12/23/24 Page 4 of 9
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4902-7637-9909v.1
11 U.S.C. § 503(b)(1)(A). “Thus, for a claim to be given priority as an administrative expense
under this provision of the Code, it must be (1) a ‘cost’ or ‘expense’ that is (2) ‘actual’ and
‘necessary’ to (3) ‘preserving the estate.’” Pennsylvania Dep't of Env't Res. v. Tri-State Clinical
Lab'ys, Inc., 178 F.3d 685, 689 (3d Cir. 1999). Put differently, “[a]n administrative expense claim
is entitled to priority under Section 503(b)(1)(A) if: (1) there was a ‘post-petition transaction
between the claimant and the estate,’ and (2) those expenses yielded a ‘benefit to the estate.’” In
re Energy Future Holdings Corp., 990 F.3d 728, 741 (3d Cir. 2021) (quoting In re Women First
Healthcare, Inc., 332 B.R. 115, 121 (Bankr. D. Del. 2005)).
10.
The first element is satisfied when the claimant renders services post-petition
necessary for preserving the estate. See id. (citing Former Employees of Builders Square Retail
Stores v. Hechinger Inv. Co. of Del. (In re Hechinger Inv. Co. of Del.), 298 F.3d 219, 226 (3d Cir.
2002)). “In Reading Co. v. Brown, the Supreme Court concluded that ‘the words ‘preserving the
estate’ include the larger objective, common to arrangements, of operating the debtor's business
with a view to rehabilitating it.’” Pennsylvania Dep't of Env't Res. v. Tri-State Clinical Lab'ys,
Inc., 178 F.3d at 689 (quoting Reading Co. v. Brown, 391 U.S. 471, 476–77, 88 S.Ct. 1759, 20
L.Ed.2d 751 (1968)). “The dictionary defines ‘necessary’ as ‘absolutely required’ or ‘needed to
bring about a certain effect or result.’” Id. (quoting Webster's II New Riverside University
Dictionary 787 (1994)). “However, the Supreme Court has held that the concept of ‘necessary
costs’ under the Code is somewhat broader than would be suggested by the dictionary definition.”
Id. “Thus, ‘usual and necessary costs should include costs ordinarily incident to operation of a
business, and not be limited to costs without which rehabilitation would be impossible.’” Id.
(quoting Reading, 391 U.S. at 483, 88 S.Ct. 1759).
Case 24-11217-BLS Doc 884 Filed 12/23/24 Page 5 of 9
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4902-7637-9909v.1
11.
“The second requirement, that the claim applicant provided a benefit to the estate
… does not itself appear in the text of Section 503(b)(1)(A).” Energy Future Holdings Corp., 990
F.3d 7at 741. “Instead, it functions as ‘merely a way of testing whether a particular expense was
truly ‘necessary’ to the estate: If it was of no ‘benefit,’ it cannot have been ‘necessary’ within the
meaning of § 503(b)(1)(A).’” Id (quoting Matter of Whistler Energy II, L.L.C., 931 F.3d 432, 443
(5th Cir. 2019) (internal quotation marks and citation omitted)). “The benefit does not, however,
‘have to be substantial’ to qualify.” Id. (quoting In re Women First, 332 B.R. at 121).
12.
The Invoices represent actual costs ordinarily incident to the operation of Vyaire’s
business during the period after the Petition Date. Real Staffing provided nine employees to Vyaire
during this time period, all of whom actually rendered services to or on behalf of Vyaire. Indeed,
Real Staffing has provided employees to Vyaire under the MSA for more than six years. There
was, therefore, a post-petition transaction between Vyaire and the estate. The employees whom
Real Staffing provided to Vyaire actually performed work for Vyaire and therefore provided a
benefit, meaning that the expense was necessary. As a result, the cost of providing these
employees constitutes an administrative expense entitled to priority under 11 U.S.C. §
503(b)(1)(A).
RELIEF REQUESTED
WHEREFORE, PREMISES CONSIDERED, Real Staffing respectfully requests that the
Court enter an order (1) granting this Application; (2) allowing Real Staffing’s administrative
expense claim in the amount of $183,012.71 and directing the Debtor to pay the same as required
in the Plan and Confirmation Order; and (3) providing Real Staffing such other and further relief
to which it may be entitled.
RESPECTFULLY SUBMITTED the 23rd day of December, 2024.
WOMBLE BOND DICKINSON (US) LLP
Case 24-11217-BLS Doc 884 Filed 12/23/24 Page 6 of 9
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4902-7637-9909v.1
December 23, 2024
WOMBLE BOND DICKINSON (US) LLP
Wilmington, Delaware
/s/ Matthew P. Ward
Matthew P. Ward, Esq. (DE Bar No. 4471)
1313 North Market Street, Suite 1200
Wilmington, Delaware 19801
Telephone: (302) 252-4320
Facsimile: (302) 252-4330
Email: matthew.ward@wbd-us.com
-and-
MUNSCH HARDT KOPF & HARR P.C.
Julian P. Vasek, Esq.
Admitted Pro Hac Vice
500 N. Akard St., Ste. 4000
Dallas, TX 75201
Telephone: (214) 855-7528
Email: jvasek@munsch.com
Counsel for Real Staffing Group
Case 24-11217-BLS Doc 884 Filed 12/23/24 Page 7 of 9
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4902-7637-9909v.1
CERTIFICATE OF SERVICE
The undersigned hereby certifies that, on December 23, 2024, he caused true and correct
copies of this document to be served (i) via the Court’s CM/ECF system on all parties entitled to
such notice; and (ii) via email on the recipients listed below:
Co-Counsel for the Debtors
KIRKLAND & ELLIS LLP
Joshua A. Sussberg, P.C.
Chris Ceresa, Esq.
Tiffani Chanroo, Esq.
Spencer Winters, Esq.
Yusuf U. Salluom, Esq.
Email: joshua.sussberg@kirkland.com
chris.ceresa@kirkland.com
tiffani.chanroo@kirkland.com
spencer.winters@kirkland.com
yusuf.salloum@kirkland.com
Co-Counsel for the Debtors
COLE SCHOTZ, P.C.
Patrick J. Reilley, Esq.
Michael E. Fitzpatrick, Esq.
Jack M. Dougherty, Esq.
Michael D. Sirota, Esq.
Email: preilley@coleschotz.com
mfitzpatrick@coleschotz.com
jdougherty@coleschotz.com
msirota@coleschotz.com
The Debtors’ investment banker
Michael Schlappig, Esq.
Jamimie Baird, Esq.
Dylan Friesner, Esq.
Email: schlappig@pjtpartners.com
baird@pjtpartners.com
friesner@pjtpartners.com
Counsel to the 1L Ad Hoc Group
GIBSON, DUNN & CRUTCHER LLP AND
PACHULSKI STANG ZIEHL & JONES LLP
Scott J. Greenberg, Esq.
Jason Zachary Goldstein, Esq.
Joshua Brody, Esq.
Kevin Liang, Esq.
Laura Davis Jones, Esq.
Email: sgreenberg@gibsondunn.com
jgoldstein@gibsondunn.com
jbrody@gibsondunn.com
kliang@gibsondunn.com
ljones@pszjlaw.com
Counsel to the Committee
MCDERMOTT WILL & EMERY LLP
Darren Azman, Esq.
Kristin Going, Esq.
David Hurst, Esq.
Maris Kandestin, Esq.
Email: dazman@mwe.com
kgoing@mwe.com
Office of the United States Trustee for the
District of Delaware
U.S. DEPARTMENT OF JUSTICE
Benjamin A. Hackman
Email: Benjamin.a.hackman@usdoj.gov
Case 24-11217-BLS Doc 884 Filed 12/23/24 Page 8 of 9
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4902-7637-9909v.1
dhurst@mwe.com
mkandestin@mwe.com
/s/ Matthew P. Ward
Matthew P. Ward (DE Bar No. 4471)
Case 24-11217-BLS Doc 884 Filed 12/23/24 Page 9 of 9