UNITED STATES BANKRUPTCY COURT
- Date
- 2025-01-17
Summary
A reply filed April 3, 2025 by Datasite LLC as Doc 1054 in In re: Vyaire Medical, Inc., Case No. 24-11217 (BLS), a Chapter 11 case in the United States Bankruptcy Court for the District of Delaware. It responds to the Plan Administrator's objection to Datasite's amended motion to allow a late filed administrative expense claim under 11 U.S.C. § 503(b)(1)(A). The reply argues that invoices of $27,340.03, $91,133.43 and $52,916.14 cover virtual data room services that benefited the estate, including access used under asset purchase agreements with Zoll Medical Corporation and Trudell Medical Limited. It states the late filing arose because notice of the contract rejection did not reach Datasite, and asks the Court to overrule the objection. It is signed by counsel Ronald S. Gellert and Magdalena Izabela Zalewski.
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Case 24-11217-BLS Doc 1054 Filed 04/03/25 Page 1 of 5
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re: Chapter 11
VYAIRE MEDICAL, INC., Case No. 24-11217 (BLS)
Liquidating Debtor.
RE: D.I. 989 and 1046
REPLY TO PLAN ADMINISTRATOR’S OBJECTION TO DATASITE LLC’S
AMENDED MOTION TO ALLOW LATE FILED ADMINISTRATIVE EXPENSE
CLAIM UNDER 11 U.S.C. §503(b)(1)(A) AND FOR ALLOWANCE AND IMMEDIATE
PAYMENT OF AN ADMINISTRATIVE EXPENSE CLAIM
Datasite LLC (“Movant”), by and through undersigned counsel, hereby submits its reply
to the Plan Administrator’s Objection (the “Objection”) to Movant’s Amended Motion to Allow
Late Filed Administrative Expense Claim Under 11 U.S.C. submits this reply (the "Reply") to
allow late filed Administrative Expense Claim under 11 U.S.C. §503(b)(1)(A) §503(b)(1)(A) and
For Allowance and Immediate Payment of an Administrative Expense Claim (the “Motion”) and
states as follows:
1. In its Objection, the Plan Administrator failed to acknowledge that Invoice Number
INV-756688, dated January 17, 2025, in the amount of $27,340.03, pertains to services rendered
from November 19, 2024, to November 27, 2024. These services were clearly provided to Vyaire
Medical Inc. (hereinafter referred to as, the “Debtor”) prior to the Effective Date of the Plan as per
the Confirmation Order, i.e. November 27, 2024. Accordingly, this portion of the claim should
undoubtedly be afforded administrative claims priority.
2. The remaining billed amounts under Invoice Number INV-752689, in the amount
of $91,133.43, for services rendered in December 2024, and Invoice Number INV-756657, in the
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Case 24-11217-BLS Doc 1054 Filed 04/03/25 Page 2 of 5
amount of $52,916.14, for services rendered from January 1, 2025, to January 18, 2025, were
incurred in the ordinary course of business of the Debtor going through the process of
reorganization. Accordingly, these amounts should be afforded administrative priority, as the
Debtors-in-Possession continued to benefit from the virtual data room remaining accessible to both
the Debtor and the purchaser of its assets. The Debtor and its debtor and non-debtor affiliates
derived a direct benefit from this access, as the virtual data room was critical to the sale process
and continued to be utilized after the Effective Date. Furthermore, any access to the data in the
virtual data room by the buyer indirectly benefitted the Debtor, as it was contractually obligated
under Asset Purchase Agreements with buyers of Debtor’s assets, Zoll Medical Corporation and
Trudell Medical Limited, to provide the buyers with access to the files stored in the data room.
Both Asset Purchase Agreements made reference to the data stored in the dataroom provided by
Datasite. The Debtor made a conscious decision to not reject Datasite’s executory contract and use
Datasite’s services during and after its sale process. Therefore, the services billed under the invoice
forming Datasite’s claim are actual, necessary costs and expenses of preserving the estate.
Administrative claims will be allowed for “actual, necessary costs and expenses of preserving the
estate….” 11 U.S.C. § 503(b)(1)(A). An expense may qualify for treatment under section 503(b)
if “(1) the right to payment arose from a postpetition transaction with the debtor” and “(2) the
consideration supporting the right to payment was beneficial to the estate of the debtor.” Woburn
Assocs. v. Kahn (In re Hemingway Transp., Inc.), 954 F.2d 1, 5 (1st Cir.1992).
3. Datasite continued to provide these services until it did not close the dataroom,
solely because it had not received any notice of the sale of assets, the voting on the Plan, the Plan
Confirmation Order, or the rejection of its claim that could provide an intimation to Datasite that
the contract would be rejected and its invoices would not be paid in the ordinary course of business.
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Case 24-11217-BLS Doc 1054 Filed 04/03/25 Page 3 of 5
The untimeliness of the claim filing is solely due to the fact that the notice of the rejection of the
contract did not reach the appropriate personnel at Datasite. Had Datasite received timely notice,
it would have promptly filed its claim before the deadline.
4. Additionally, no prior written notice was provided by the Debtor to Datasite when
the Debtor transferred or granted virtual dataroom access to Zoll and Trudell. The e-mail
communicated dated January 14, 2025 from Joel Amico, a representative of the Plan Administrator
was the first notice regarding rejection of the executory contract that Datasite received after which
Datasite promptly closed the virtual dataroom. Paragraph 9 (f) of the United States General Terms
and Conditions (Revised July 31, 2023) which forms part of the Agreement between Datasite and
Vyaire required a written notice from the Debtor and states as follows:
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(f)Assignment. Upon providing written notice, either Party may assign its rights,
interests, and/or obligations under this Agreement or any SOW to any parent,
subsidiary, Affiliate, or to a successor of all its assets or stock. Notwithstanding the
forgoing, Customer may not assign its rights, interests, and/or obligations under this
Agreement or any SOW to any Datasite Competitor without Datasite’s prior written
consent. For purposes of this section, “Competitor” shall mean any entity which, either
itself or has an Affiliate which, sells, licenses, or provides, any software, application
service or system comprised of one or more electric or digital document repositories for
facilitating transaction due diligence, mergers, acquisitions, divesture, financing,
investment, investor or government relations, research and development, clinical trials
or other business processes in competition with any of the Services or other services
Datasite provides. This Agreement is binding upon and inure to the benefit of the Parties
and their respective successors and assigns.
5. The Debtor undeniably benefitted from Datasite’s services in providing and
maintaining the virtual data room, which was critical to the sale process and continued to provide
value even after the sale of its assets. “A benefit to the estate can be found when there is some,
actual purpose for retaining the property at issue.” See Kimzey, 2018 WL 1321971, at *6. Although
the Debtor has maintained that it did not use Datasite’s services after the Effective Date, the use
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Case 24-11217-BLS Doc 1054 Filed 04/03/25 Page 4 of 5
of the services is not required to give rise to an administrative claim. See id. (finding that the debtor
obtained a benefit from retention of equipment, even if it did not use the equipment, when the
debtor decided it would benefit in some manner from the retention of the equipment). In the present
case, the accessibility of the virtual data room facilitated the transaction by enabling the Debtor to
fulfill its obligations to the buyers and ensuring a seamless transfer of information essential to the
sale. Moreover, the continued access to the data room beyond the Effective Date has provided an
ongoing benefit to the Debtor, as it remains a crucial repository of information required under the
Zoll and Trudell Asset Purchase Agreements. Allowance of Datasite’s claim under § 503(b) is
supported by the record in these proceedings and aligns with the principle that services that
substantially benefit the estate should be afforded administrative priority. Had Datasite not
continued to provide these services, the Debtor’s ability to complete the sale and comply with its
contractual obligations would have been significantly impaired. Accordingly, Datasite has met its
burden of demonstrating that its services were essential to the estate and that the corresponding
claim should be granted administrative priority pursuant to Bankruptcy Code § 503(b).
WHEREFORE, Datasite requests that the Court overrule the Plan Administrator’s
objection to the Motion and grant such other relief as may be just and proper.
Dated: April 3, 2025 GELLERT SEITZ BUSENKELL & BROWN, LLC
By: /s/ Ronald S. Gellert
Ronald S. Gellert (DE 4259)
1201 N. Orange Street, 3rd Floor
Wilmington, DE 19801
Tel: 302-425-5806
Email: rgellert@gsbblaw.com
and
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Case 24-11217-BLS Doc 1054 Filed 04/03/25 Page 5 of 5
THE LAW OFFICE OF MAGDALENA ZALEWSKI
PLLC
By: /s/ Magdalena Izabela Zalewski
Magdalena Izabela Zalewski, Esq.
1250 Broadway, 36th Floor
New York, NY 10001
Tel. (646) 891-4864
Fax (646) 891-4868
Email: mz@magdalenazalewski.com
Counsel for Datasite LLC
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