Revised Salesforce Vyaire Request for Payment v2
- Date
- 2025-01-13
Summary
Doc 893, filed December 27, 2024 in In re Vyaire Medical, Inc., et al., Case No. 24-11217 (BLS), in the U.S. Bankruptcy Court for the District of Delaware, is Salesforce, Inc.'s request for allowance and payment of an administrative expense claim. Salesforce asks the court to allow an administrative expense of not less than US $207,783.78 for customer relationship management and software services it says it provided to Vyaire Medical, Inc. after the June 9, 2024 petition date, and to direct payment in full. The request relies on 11 U.S.C. §§503(b)(1)(A) and 507(a)(2) and a supporting declaration, and cites Third Circuit and Delaware bankruptcy decisions on post-petition services under executory contracts. It lists an objection deadline of January 13, 2025 and a hearing date of January 29, 2025, and reserves Salesforce's rights.
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
Case 24-11217-BLS Doc 893 Filed 12/27/24 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)
Objection Deadline:
January 13, 2025 at 4:00 p.m. (ET)
Hearing Date:
January 29, 2025 at 10:30 a.m. (ET)
REQUEST FOR ALLOWANCE AND PAYMENT OF
ADMINISTRATIVE EXPENSE CLAIM OF SALESFORCE, INC.
Salesforce, Inc. (“Salesforce”), by and through the undersigned counsel, hereby moves (the
“Administrative Expense Request”) for the entry of an order substantially in the form attached
hereto as Exhibit A (the “Administrative Expense Order”) (a) allowing an administrative expense
in an amount not less than US $207,783.78 (the “Administrative Expense Claim”) incurred in
connection with the provision of the Salesforce Services2 (as hereinafter identified) provided by
Salesforce to Vyaire Medical, Inc. (the “Debtor”), and the acceptance and use of the Salesforce
Services by the Debtor, from and after Petition Date through the date that the Salesforce
Contract is assumed or rejected by the Debtor, pursuant to the Salesforce Contract, (b) directing
the Administrative Expense Claim be paid in full as soon as practicable after entry of the
Administrative Expense Order, or at such time as the Court otherwise orders, (c) approving the
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, along with the last four digits of their U.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
All capitalized terms shall have the meaning as set forth in this Request for Allowance and Payment of
Administrative Expenses and, if not defined herein, as set forth in the Ramirez Declaration filed in support of this
request.
34174224v.2
Case 24-11217-BLS Doc 893 Filed 12/27/24 Page 2 of 7
Reservation of Rights asserted hereinafter, and (d) granting such other and further relief as may be
deemed just and proper under the circumstances of this case.
This Administrative Expense Request is brought pursuant to 11 U.S.C. §§503(b)(1)(A) and
507(a)(2), and is based on the matters set forth herein, the Declaration of Kevin Ramirez in Support
of the Request for Allowance and Payment of Administrative Expense of Salesforce, Inc. (the
“Ramirez Declaration”) filed in support hereof, the files and the records in this case, and such other
and further evidence as may be submitted at or before the trial on this matter.
Salesforce requests that the Court take judicial notice of the pleadings filed in this case and
the facts set forth in the Court’s orders, findings of fact and conclusions of law pursuant to Rule
201 of the Federal Rules of Evidence (as incorporated by Rule 9017 of the Federal Rules of
Bankruptcy Procedure).
JURISDICTION AND VENUE
1. This Court has jurisdiction to consider this matter pursuant to 28 U.S.C. §§157 and
1334. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A), (B) and (O).
2. Venue is proper before this Court pursuant to 28 U.S.C. §§ 1408 and 1409.
BACKGROUND
3. Salesforce is a Delaware corporation, and, among other activities, it provides on-
demand customer relationship management and software application services (collectively, the
“Salesforce Services”) to its business customers (individually, a “Salesforce Customer” and,
collectively, “Salesforce Customers”). See Ramirez Declaration at ¶2.
THE SALESFORCE CONTRACT
4. Prior to June 9, 2024, the Debtor entered into those certain Order Forms (the
“Order Forms”),3 which are governed by an applicable Master Subscription Agreement (the
3
The Administrative Expense Claim Summary is attached to the Ramirez Declaration as Exhibit A and is
incorporated by reference here in as if fully set forth.
-2-
34174224v.2
Case 24-11217-BLS Doc 893 Filed 12/27/24 Page 3 of 7
“MSA” and, together with the Order Forms, collectively the “Salesforce Contract”).4 Pursuant to
the Salesforce Contract: (i) the Debtor ordered certain Salesforce Services and became obligated
to pay in full the aggregate amounts due pursuant to this contract with respect to such services;
(ii) Salesforce became obligated to provide the Salesforce Services to the Debtor; (iii) Salesforce
has provided such services to the Debtor; and (iv) the Debtor accepted and utilized, and continue
to accept and utilize, the Salesforce Services provided pursuant to the Salesforce Contract. See
Ramirez Declaration at ¶¶ 7 and 8.
BANKRUPTCY CASE
5. On June 9, 2024 (the “Petition Date”) the Debtor filed a voluntary petition for relief
under chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for
the District of Delaware (the “Court”) and, thereby, commenced this case under chapter 11 (the
“Bankruptcy Case”).
6. On November 27, 2024 , the Debtor filed its Notice of (I) Entry of Confirmation
Order, (II) Occurrence of Effective Date, and (III) Related Bar Dates [D.I. 810] (the “Notice of
Effective Date”) listing the Effective Date, as defined in the Plan, as having occurred on November
27, 2024, and the deadline to file Administrative Claims as December 27, 2024 (the
“Administrative Claims Bar Date”).
The Administrative Expense Claim
7. From and after the Petition Date, the Debtor knowingly accepted the Salesforce
Services provided, and that provision of such services was in the ordinary course of business of
the parties. See Ramirez Declaration at ¶11.
8. From the commencement of the Salesforce Contract, the Debtor has failed to pay
all post-petition Fees due and owing pursuant to the Salesforce Contract and, more specifically, an
amount of not less than US $207,783.78, (the “Administrative Expense Claim”)5 remains due and
4
Due to the confidentiality provisions of the MSA, a copy of the Salesforce Contract and related invoices (the
“Invoices”) are not attached to the Ramirez Declaration. However, subject to appropriate non-disclosure
protections, a copy of the Salesforce Contract and the Invoices will be made available to the Debtor in
connection with this Administrative Expense Request.
5
See, the Administrative Expense Claim Summary which is attached to the Ramirez Declaration as Exhibit A and is
-3-
34174224v.2
Case 24-11217-BLS Doc 893 Filed 12/27/24 Page 4 of 7
owing to Salesforce pursuant to the Salesforce Contract for services arising on or after the Petition
Date and any time prior to the Rejection Date. See Ramirez Declaration at ¶12.
LEGAL AUTHORITY
Administrative Expenses Are Allowed for Actual, Necessary Costs
And Expenses of Preserving the Estate.
9. The Bankruptcy Code provides administrative status to claims for “the actual,
necessary costs and expenses of preserving the estate,” including wages, salaries, or commissions
for services rendered after the commencement of the case. In re Goody’s Fam. Clothing Inc., 610
F.3d 812, 817 (3d Cir. 2010), cert. denied, 562 U.S. 1064, 131 S. Ct. 662, 178 L.Ed. 2d 483 (2010);
accord, In re Pinnacle Brands, Inc., 259 B.R. 46, 50 (Bankr. D. Del. 2001) citing 11 U.S.C. §
503(b).6 In the Third Circuit, the phrase “actual, necessary costs and expenses of preserving the
estate . . . should include costs ordinarily incident to operation of a business, and not be limited to
costs without which rehabilitation would be impossible.” Pennsylvania Dept. of Env’t Res. v. Tri-
State Clinical Laboratories, Inc., 178 F.3d 685, 689-90 (3d Cir. 1999) (emphasis added) (citing
Reading Co. v. Brown, 391 U.S. 471, 483, 88 S. Ct. 1759, 20 L. Ed. 2d 751 (1968)). It is well
established that “if a debtor in possession elects to continue to receive benefits from the other party
to an executory contract pending a decision to reject or assume a contract, the debtor in possession
is obligated to pay for the reasonable value of those services.” See NLRB v. Bildisco & Bildisco,
465 U.S. 513, 531, 104 S.Ct. 1188, 79 L.Ed.2d 482 (1984).
10. “To establish administrative expense priority the burden is on the claimant to
demonstrate that the obligation claimed as administrative expenses (1) arose out of a post-petition
transaction with the debtor in possession and (2) directly and substantially benefitted the estate.
Calpine Corp. v. O’Brien Env’t Energy, Inc. (In re O’Brien Env’t Energy, Inc.), 181 F.3d 527,
532-33 (3d Cir. 1999). The principal purpose of 11 U.S.C. § 503 is to induce entities to do business
with a debtor after bankruptcy by ensuring that those entities receive payment for services
incorporated by reference here in as if fully set forth.
6
Accord, In re Valley Media, Inc., 279 B.R. 105, 141 (Bankr. D.Del. 2002); In re Unidigital, Inc., 262 B.R. 283, 288
(Bankr. D. Del. 2001); In re Mid-Am. Waste, 228 B.R. 816, 821 (Bankr. D. Del 1999).
-4-
34174224v.2
Case 24-11217-BLS Doc 893 Filed 12/27/24 Page 5 of 7
rendered. Section 503(b) contemplates some quid-pro-quo wherein the estate accrues debt in
exchange for some consideration necessary to the operation of the estate. Pennsylvania Dept. of
Env’t Res., 178 F.3d at 689-90.
11. Thus, if a non-debtor party confers a benefit on a bankruptcy estate after the petition
date pursuant to an executory contract, the non-debtor counterparty to that contract holds an
administrative expense claim to the extent of the post-petition benefit conferred on the estate.
Sharon Steel Corp. v. National Fuel Gas Distrib. Corp., 872 F.2d 36 (3d Cir. 1989); In re Waste
Sys. Int’l, Inc., 280 B.R. 824, 826 (Bankr. D. Del. 2002) (citing NLRB v. Bildisco, 465 U.S. 513,
531, 104 S.Ct. 1188, 79 L.Ed.2d 482 (1984)). Any other result would improperly confer a benefit
on the bankruptcy estate while permitting the estate to escape the contract’s burdens.
12. Salesforce submits that its right to allowance and payment of the Administrative
Expense Claim is clear: (A) Salesforce provided the Salesforce Services from and after the Petition
Date pursuant to the Salesforce Contract; (B) the Debtor (in its capacity as debtor-in-possession)
knowingly and willingly accepted the Salesforce Services; (C) the Salesforce Services were
supplied to and beneficial to the debtor in possession in the operation of its business; and, (D)
regardless whether, ultimately, the estate is liquidated or its business operations are sold as a going
concern, utilization of the Salesforce Services by the Debtor preserves the Debtor’s estate.
Salesforce further submits that access to the account, and usage of the Salesforce Services, directly
and substantially benefitted the Debtor’s estate by permitting the Debtor’s continued post-petition
operations without interruption.
13. Based on all these facts and circumstances, Salesforce submits that the provision of
the Salesforce Services, unquestionably, constitutes “actual, necessary costs and expenses of
preserving the estate” that should be allowed as administrative expenses, 11 U.S.C. §503(b)(1)(A),
and should receive the highest priority in payment in this bankruptcy proceeding pursuant to 11
U.S.C. §507(a)(1).
RESERVATION OF RIGHTS
14. Notwithstanding the foregoing, Salesforce expressly reserves (and hereby
-5-
34174224v.2
Case 24-11217-BLS Doc 893 Filed 12/27/24 Page 6 of 7
expressly does not waive) (a) all rights, claims, counterclaims, defenses, interests, actions and/or
other remedies (collectively, its “Rights”) including, without limitation, the right to amend, modify
and/or supplement (A) any proof of claim already filed by Salesforce and/or any other claim or
proof of claim that may be filed in the future (collectively, the “Claims”), (B) the Administrative
Expense Claim asserted hereby and/ or any further administrative expenses as may be asserted
hereinafter (collectively, the “Administrative Expenses”), (C) a judicial determination of the
amount(s) due and owing with regard to the Claims and/or the Administrative Expenses, (D) this
Administrative Expense Request in response to any submission by any party-in-interest including,
without limitation, any objection to this Administrative Expense Request or an amendment to it,
and (E) the right to adopt any other pleadings filed by any other party related to the Claims, this
Administrative Expense Claim, any other Administrative Expenses or the Administrative Expense
Requests as may be filed hereinafter (collectively, the “Reservation of Rights”).
WHEREFORE, Salesforce respectfully requests the Court enter its Administrative
Expense Order –
(A) Allowing an administrative expense claim, in the amount not less than of US
$207,783.78 pursuant to the Salesforce Contract for Salesforce Services provided from on or after
the Petition Date;
(B) requiring the Debtor to pay the Administrative Expense Claim, in full, as soon as
practicable after entry of the Administrative Expense Order, or at such time as the Court otherwise
orders;
(C) approving the Reservation of Rights; and granting such other and further relief as
may be deemed just and proper under the circumstances of this case.
-6-
34174224v.2
Case 24-11217-BLS Doc 893 Filed 12/27/24 Page 7 of 7
Dated: December 27, 2024 Respectfully submitted,
Wilmington, Delaware
WHITE AND WILLIAMS LLP
/s/ Rochelle Gumapac
Rochelle Gumapac, Esq. (No. 4866)
Michael A. Ingrassia, Esq. (No. 7068)
600 North King Street, Suite 800
Wilmington, DE 19801
Phone: 302-467-4503
Fax: 302-467-4550
Email: gumapacr@whiteandwilliams.com
ingrassiam@whiteandwilliams.com
-and-
Amy E. Vulpio, Esq.
1650 Market Street, Suite 1800
One Liberty Place
Philadelphia, PA 19103-7395
Telephone: (215) 864-6250
Facsimile: (215) 789-7550
Email: vulpioa@whiteandwilliams.com
-and-
BIALSON, BERGEN & SCHWAB,
A Professional Corporation
Gaye Nell Heck, Esq.
830 Menlo Avenue, Suite 201
Menlo Park, CA 94025
Telephone: (650) 857-9500
Fax: (650) 494-2738
E-mail: Gheck@bbslaw.com
Attorneys for Creditor Salesforce, Inc.
-7-
34174224v.2
File and source
- File
- gov.uscourts.deb.193283.893.0.pdf
- Size
- 119,934 bytes
- SHA-256
- 9356d1fb5e99f552ef610664bf8cfc398c74a9ffb2609a1d0a17b8e6be02a989
- Original
- PACER (login required)