Request for Payment of Admin Expense Claim (Cognizant
- Date
- 2025-01-29
Summary
A motion by Cognizant Worldwide Limited and Cognizant Technology Solutions U.S. Corp. for the allowance and payment of an administrative expense claim, filed December 27, 2024 as Doc 895 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, with a hearing date of January 29, 2025. The motion states that Cognizant provided business process outsourcing services to the debtors under a Master Services Agreement after the June 9, 2024 petition date. It notes that the plan became effective on November 27, 2024 and that administrative claim requests were due December 27, 2024. Citing 11 U.S.C. § 503(b)(1)(A), it asks the court to allow and direct payment of a claim of $154,314.15, and refers to invoices attached as Exhibit B.
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Case 24-11217-BLS Doc 895 Filed 12/27/24 Page 1 of 5
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
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: Chapter 11
In re :
: Case No. 24-11217 (BLS)
VYAIRE MEDICAL, INC., et al., :
: Jointly Administered
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Debtors. :
: Hearing Date: 1/29/2025 at 10:30AM (ET)
: Objection Date: 1/10/2025 at 4:00PM(ET)
---------------------------------------------------------------x
MOTION OF COGNIZANT FOR THE ALLOWANCE AND PAYMENT OF
ADMINISTRATIVE EXPENSE CLAIM
Cognizant Worldwide Limited and Cognizant Technology Solutions U.S. Corp.
(collectively “Cognizant”), by and through its undersigned counsel, hereby files this motion (the
“Motion”), pursuant to 11 U.S.C. §§ 503(a), 503(b)(1)(A), and 507(a)(2) for the allowance and
prompt payment of its administrative expense claim. In support of such request, Cognizant
respectfully states as follows:
JURISDICTION AND VENUE
1. The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334
and the Amended Standing Order of Reference from the United States District Court for the
District of Delaware, dated February 29, 2012. Venue is proper in the Court under 28 U.S.C.
§§ 1408 and 1409. This matter is a core proceeding under 28 U.S.C. § 157(b).
2. The statutory basis for the relief requested in this Motion is section 503(b)(1)(A) of
the Bankruptcy Code.
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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.
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Case 24-11217-BLS Doc 895 Filed 12/27/24 Page 2 of 5
BACKGROUND
3. Pursuant to a Master Services Agreement, as amended from time to time, and
various statements of work and work orders issued thereunder (collectively, the “Agreement”),
Cognizant agreed to provide certain services to the Debtors and the Debtors agreed to pay for such
services as invoiced.
4. On June 9, 2024 (the “Petition Date”), Vyaire Medical, Inc. and its affiliates (the
“Debtors”), each filed a voluntary petition for relief under chapter 11 of title 11 of the United
States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of
Delaware (the “Court”). The Debtors continue to operate their businesses as debtors in possession
pursuant to Bankruptcy Code sections 1107(a) and 1108. The Debtors’ cases are being jointly
administered.
5. Following the Petition Date, Cognizant has continued to provide services to the
Debtors pursuant to the terms of the Agreement.
6. On November 14, 2024, the Court confirmed the Second Amended Joint Chapter
11 Plan of Reorganization of Vyaire Medical, Inc. and Its Debtor Affiliates [Docket 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 [Docket No. 745] (the
“Plan Confirmation Order”).
7. On November 27, 2024, the Debtors filed the Notice Of (I) Entry of Confirmation
Order, (II) Occurrence Of Effective Date, and (III) Related Bar Dates [ECF No. 810] (the “Notice
of Effective Date”).
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8. The Notice of Effective Date provided that the Plan became effective on November
27, 2024 (the “Effective Date”) and set the deadline for filing requests for payment of
administrative expense claims as December 27, 2024.
RELIEF REQUESTED
9. By this Motion, Cognizant respectfully requests that the Court enter an order,
substantially in the form attached hereto as Exhibit A (the “Administrative Expense Order”),
(a) allowing Cognizant’s administrative expense claim, in an amount not less than $154,314.15
(the “Administrative Expense Claim”), and (b) ordering the Debtors to promptly pay Cognizant
the Administrative Expense Claim.
LEGAL ANALYSIS
10. Administrative expenses “receive priority payment over other claims pursuant to
Bankruptcy Code § 507(a)(2).” In re Highway Techs., Inc., No. 13-11326 (KJC), 2015 Bankr.
LEXIS 308, at *10 (Bankr. D. Del. Jan. 30, 2015). Section 503(b) of the Bankruptcy Code provides
for the priority payment of certain enumerated categories of allowable administrative expenses. 11
U.S.C. § 503(b). One of the categories of administrative expenses permitted under the Bankruptcy
Code is the “the actual, necessary costs and expenses of preserving the estate.” 11 U.S.C.
§ 503(b)(1)(A). 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.”
Goody's Family Clothing, Inc. v. Mountaineer Prop. Co. II, LLC (In re Goody's Family Clothing,
Inc.), 401 B.R. 656, 666 (D. Del. 2009) (quoting NLRB v. Bildisco & Bildisco, 465 U.S. 513, 531,
104 S. Ct. 1188, 79 L.Ed.2d 482 (1984)).
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11. In order to qualify as an administrative expense under Section 503, the claim must
have arisen post-petition and as the result of actions taken to benefit the estate. See In re Marcal
Paper Mills, Inc., 650 F.3d 311, 320-21 (3d Cir. 2011) (explaining that administrative expenses
must arise from services provided to the bankruptcy estate post-petition and must be beneficial to
the debtor in possession in the operation of its business). The Third Circuit has explained that
“[b]y limiting priority to those claims that are actual and necessary, the Code prevents the estate
from being consumed by administrative expenses, and preserves the estate for the benefit of the
creditors.” Marcal, 650 F.3d at 315.
12. The Debtors benefitted from the post-petition use of Cognizant’s services and
derived an actual and necessary cost and expense that preserved its estate by continuing to use
Cognizant’s services. Cognizant provides business process outsourcing to the debtor by
performing duties on behalf of the debtor such as managing accounts payable and accounts
receivable. Copies of the invoices that comprise the Administrative Expense Claim are attached
hereto as Exhibit B.
RESERVATION OF RIGHTS
13. Cognizant expressly reserves (and hereby expressly does not waive) all of its rights
to revise, modify, update, and amend its request for the allowance and prompt payment of its
Administrative Expense Claim, including the right to assert additional administrative expense
claims against the Debtors.
WHEREFORE, Cognizant respectfully requests that the Court:
(a) Allowing Cognizant an administrative claim in the amount of $154,314.15;
(b) Directing the Debtors to pay the administrative claim to Cognizant pursuant to the
Plan; and
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(c) Granting such other and further relief as is just and appropriate under the
circumstances.
Dated: December 27, 2024 Respectfully submitted,
Wilmington, Delaware
DLA PIPER LLP (US)
/s/ R. Craig Martin
R. Craig Martin (DE 5032)
Matthew S. Sarna (DE 6578)
1201 North Market Street, Suite 2100
Wilmington, Delaware 19801
Telephone: (302) 468-5700
Facsimile: (302) 394-2341
Email: craig.martin@us.dlapiper.com
matthew.sarna@us.dlapiper.com
and
Dale K. Cathell
Virginia R. Callahan
650 South Exeter Street, Suite 1100
Baltimore, Maryland 21202
Telephone: (410) 580-3000
Facsimile: (410) 580-3001
Email: dale.cathell@us.dlapiper.com
virginia.callahan@us.dlapiper.com
Counsel for Cognizant Worldwide Limited and
Cognizant Technology Solutions U.S. Corp.
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