Vyaire - Third Omnibus Claims Objection to Claims (Non-Substantive Tax - Duplicate and Late Filed)
- Date
- 2025-06-11
Summary
The Plan Administrator's third omnibus objection (non-substantive) to certain claims, filed May 8, 2025 as Doc 1081 in the chapter 11 case of Vyaire Medical, Inc., Case No. 24-11217 (BLS), in the U.S. Bankruptcy Court for the District of Delaware, set for hearing June 11, 2025. It asks the Court to enter a proposed order disallowing and expunging claims listed on Schedule 1 as duplicate, Schedule 2 as late filed, and Schedule 3 as filed with insufficient documentation, under section 502(b) of the Bankruptcy Code, Bankruptcy Rule 3007 and Local Rule 3007-1. It recites that the Plan was confirmed on November 14, 2024 and became effective November 27, 2024, and that the Bar Date Order set August 2, 2024 as the general bar date and December 9, 2024 as the governmental bar date. It runs 12 pages and attaches the proposed order and a supporting declaration.
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Case 24-11217-BLS Doc 1081 Filed 05/08/25 Page 1 of 12
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
)
In re: ) Chapter 11
)
VYAIRE MEDICAL, INC.,1 ) Case No. 24-11217 (BLS)
)
Liquidating Debtor. ) Hearing Date: June 11, 2025 at 10:30 a.m. (ET)
) Obj. Deadline: June 4, 2025 at 4:00 p.m. (ET)
THE PLAN ADMINISTRATOR’S THIRD OMNIBUS OBJECTION
(NON-SUBSTANTIVE) TO CERTAIN CLAIMS
(Duplicate, Late Filed, Insufficient Documentation)
TO ALL PARTIES RECEIVING THIS OBJECTION:
YOU SHOULD REVIEW SCHEDULE 1, SCHEDULE 2, AND SCHEDULE 3 TO THE
PROPOSED ORDER TO LOCATE YOUR NAME AND CLAIM(S) AND DETERMINE
IF YOUR CLAIM(S) ARE SUBJECT TO THIS OBJECTION. IF YOUR CLAIM(S) ARE
LISTED ON THE SCHEDULES ATTACHED TO THE PROPOSED ORDER, YOU
MAY HAVE SUBSTANTIVE RIGHTS AFFECTED BY THIS OBJECTION.
YOUR SUBSTANTIVE RIGHTS ALSO MAY BE AFFECTED BY FURTHER
OBJECTIONS THAT MAY BE FILED IN THESE CHAPTER 11 CASES.
THE RELIEF SOUGHT IN THIS OBJECTION IS WITHOUT PREJUDICE TO THE
RIGHTS OF THE PLAN ADMINISTRATOR, THE DEBTORS, THEIR ESTATES, ANY
SUCCESSORS THERETO OR ANY OTHER PARTY IN INTEREST TO PURSUE
FURTHER OBJECTIONS AGAINST THE CLAIMS SUBJECT TO THIS OBJECTION,
AND NOTHING HEREIN OR THE PROPOSED ORDER IS INTENDED OR SHALL BE
DEEMED TO BE AN ALLOWANCE OF ANY SUCH CLAIMS.
David M. Barse, solely in his capacity as the Plan Administrator of Vyaire Medical, Inc.,
et al. (the “Plan Administrator”), appointed pursuant to the Second Amended Joint Chapter 11
Plan of Vyaire Medical, Inc. and Its Debtor Affiliates [Docket No. 719] (the “Plan”), which was
confirmed by the Order of the United States Bankruptcy Court for the District of Delaware (the
1
This chapter 11 case is now being administered by the Plan Administrator pursuant to the terms of the Findings
of Fact, Conclusions of Law, and Order Approving the Debtors’ Disclosure Statement for, and Confirming the
Second Amended Joint Chapter 11 Plan of Vyaire Medical, Inc. and Its Debtor Affiliates Pursuant to Chapter
11 of the Bankruptcy Code [Docket No. 745] (the “Confirmation Order”). The Plan Administrator’s mailing
address is Vyaire Medical, Inc., Attn: David M. Barse, Plan Administrator, c/o Cole Schotz P.C., 500 Delaware
Avenue, Suite 600, Wilmington, DE 19801.
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“Court”) on November 14, 2024 [Docket No. 745] (the “Confirmation Order”),2 hereby files this
third omnibus objection (non-substantive) (the “Objection”) seeking entry of an order,
substantially in the form attached hereto as Exhibit A (the “Proposed Order”), disallowing and
expunging the claims listed on (i) Schedule 1 (the “Duplicate Claims”), (ii) Schedule 2 (the
“Late Filed Claims”), and (iii) Schedule 3 (the “Insufficient Documentation Claims”). In
support of the Objection, the Plan Administrator submits and incorporates herein the declaration
of Joel Amico of AP Services, LLC attached hereto as Exhibit B (the “Amico Declaration”), and
respectfully represents as follows:
JURISDICTION AND VENUE
1. This Court has jurisdiction to consider the Objection under 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. This is a core proceeding under 28 U.S.C.
§ 157(b) and, pursuant to Rule 9013-1(f) of the Local Rules of Bankruptcy Practice and
Procedure of the United States Bankruptcy Court for the District of Delaware (the “Local
Rules”), the Plan Administrator consents to the entry of a final order by the Court in connection
with the Objection to the extent that it is later determined that the Court, absent consent of the
parties, cannot enter final orders or judgments consistent with Article III of the United States
Constitution.
2. Venue is proper in this District under 28 U.S.C. §§ 1408 and 1409.
3. The statutory and legal predicates for the relief requested in the Objection are
sections 502(b) of title 11 of the United States Code, 11 U.S.C. §§ 101-1532 (the “Bankruptcy
2
Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the
Confirmation Order or Plan, as applicable.
2
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Code”), Rule 3007 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”),
Local Rule 3007-1, and the General Order Regarding Applicability of Rule 3007(c) of the
Amended Federal Rules of Bankruptcy Procedure (the “Rule 3007(c) General Order”).
BACKGROUND
A. The Chapter 11 Cases
4. On June 9, 2024, Vyaire Medical, Inc. and its affiliated debtors in the above-
captioned chapter 11 cases (collectively, the “Debtors”) each commenced a voluntary case under
the Bankruptcy Code with the Court.
5. The Debtors operated their business and managed their properties as debtors in
possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code
6. On November 14, 2024, this Court entered the Confirmation Order.
7. On November 27, 2024 (the “Effective Date”), the Plan became effective in
accordance with its terms [Docket No. 810].
8. On the Effective Date, David M. Barse, in his capacity as Plan Administrator,
became the sole representative of the Debtors’ estates for the purpose of, inter alia, reconciling
claims filed against the Debtors’ estates and facilitating distributions in accordance with the Plan.
See Plan, Art. IV.E. and VII.
9. On January 25, 2025, the Court entered a Final Decree Closing Certain Cases
[Docket No. 974], inter alia, closing all of the Debtors’ cases other than the above-captioned
case and authorizing that relief in connection with any of the Debtors be filed in the above-
captioned case.
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B. The Claims Reconciliation Process
10. On July 9, 2024, the Court entered the Order (I) Setting Bar Dates for Filing
Proofs of Claim, Including Under Section 503(b)(9), (II) Establishing Amended Schedules Bar
Date and Rejection Damages Bar Date, (III) Approving the Form of and Manner for Filing
Proofs of Claim, Including Section 503(b)(9) Requests, and (IV) Approving Form and Manner of
Notice Thereof [Docket No. 227] (the “Bar Date Order”).
11. The Bar Date Order established, inter alia, (i) August 2, 2024 (the “General Bar
Date”) as deadline for all creditors, other than governmental units, holding a prepetition claim
against one or more of the Debtors to file and serve a proof of claim and (ii) December 9, 2024
(the “Governmental Bar Date”) as the deadline for all governmental units holding a prepetition
claim against one or more of the Debtors to file and serve a proof of claim. See Bar Date Order at
¶¶ 3.a. and b.
12. Pursuant to the Plan, the deadline for creditors to file Administrative Claims
against the Debtors’ estates expired on December 27, 2024. See Plan, Art. I.A.5.
13. Subject to the Plan Administrator’s ability to seek an extension of such deadline,
the Plan established May 27, 20253 as the deadline to file objections to the allowance of Claims
filed against the Debtors. See Plan, Art. VII.E.
14. On April 28, 2025, the Court entered the Order Approving the Plan
Administrator’s (I) First Motion to Extend the Claims Objection Deadline and (II) Second
Motion to Extend the Administrative Claims Objection Deadline [Docket No. 1074] (the
“Extension Order”).
3
Because 180 days after the Effective Date falls on Memorial Day, May 26, 2025, the Claims Objection
Deadline rolls until the next business day – i.e., Tuesday, May 27, 2025. See FED. R. BANKR. P. 9006(a).
4
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15. Pursuant to the Extension Order, (i) the deadline to object to all Claims, other than
Administrative Claims, is November 24, 2025 and (ii) the deadline to object to Administrative
Claims is August 25, 2025.
16. The Plan Administrator, with the assistance of his professional advisors, has been
reviewing and reconciling the filed proofs of claim with the Debtors’ books and records to
determine the validity of the asserted claims. This reconciliation process includes identifying
particular categories of claims that may be targeted for reduction, reclassification, and
disallowance or expungement. To avoid possible improper recovery by claimants, the Plan
Administrator is filing this Objection to the Disputed Claims (as defined below).
RELIEF REQUESTED
17. By this Objection, the Plan Administrator objects to the claims set forth on
Schedules 1, 2, and 3 to the Proposed Order (collectively, the “Disputed Claims”) pursuant to
section 502(b) of the Bankruptcy Code, Bankruptcy Rule 3007 and Local Rule 3007-1. The Plan
Administrator respectfully requests entry of the Proposed Order disallowing and expunging the
(i) Duplicate Claims on Schedule 1 to the Proposed Order, (ii) Late Filed Claims on Schedule 2
to the Proposed Order, and (iii) Insufficient Documentation Claims on Schedule 3 to the
Proposed Order, as set forth herein.
OBJECTION
A. Legal Standard
18. When asserting a proof of claim against a bankrupt estate, a claimant must allege
facts that, if true, would support a finding that the debtor is legally liable to the claimant. See In
re Energy Future Holdings, 2016 WL 4925052, at *3 (D. Del. Sept. 14, 2016) (“The initial
burden is on the claimant to allege sufficient facts to support the claim”); In re Allegheny Int’l,
Inc., 954 F.2d 167, 173 (3d. Cir. 1992). Where the claimant alleges sufficient facts to support its
5
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claim, its claim is afforded prima facie validity. See Allegheny Int’l, 954 F.2d at 173. A party
wishing to dispute such a claim must produce evidence in sufficient force to negate the claim’s
prima facie validity. See Energy Future Holdings, 2016 WL 4925052, at *3 (“The objector must
produce evidence which, if believed, would refute at least one of the allegations that is essential
to the claim’s legal sufficiency”); see also 11 U.S.C. § 502(a); FED. R. BANKR. P. 3001(f). In
addition, Bankruptcy Rule 3007 and Local Rule 3007-1 permits the Plan Administrator to make
omnibus objections to the Disputed Claims.
19. A claim, however, should not be allowed if that claim is unenforceable against a
debtor and property of a debtor, under any agreement or applicable law. See 11 U.S.C.
§ 502(b)(1). If an objection is made to the proof of claim, the claimant has the ultimate burden
of persuasion as to the validity and amount of the claim. See Allegheny Int’l, 954 F.2d at 172.
B. Duplicate Claims
20. The Bankruptcy Rules and Local Rules specifically provide for the disallowance
of the Duplicate Claims on the basis asserted by the Plan Administrator. Bankruptcy Rule
3007(d)(1) permits omnibus claim objections on the basis that the claims should be disallowed
because “they duplicate other claims.” FED. R. BANKR. P. 3007(d)(1).
21. The Plan Administrator has reviewed the Duplicate Claims on Schedule 1 to the
Proposed Order and has determined that each claim is duplicative of the corresponding
“Remaining Claim” identified on Schedule 1 (the “Remaining Claims”). The Plan
Administrator believes that it was not the intention of the claimants asserting multiple identical
claims to seek a double recovery against the Debtors’ estates. Instead, the filing of the Duplicate
Claims may be a function of the claimants filing identical proofs of claim forms on account of a
single claim through different means (e.g., submitting electronically and via mail). Regardless of
the claimants’ reasons for filing the Duplicate Claims, at most, only one claim against the
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Debtors’ estates should be allowed for each claimant. Any failure to disallow the Duplicate
Claims will result in the applicable claimants potentially receiving an unwarranted double
recovery against the Debtors’ estates, to the detriment of other creditors in these chapter 11
cases.
22. Accordingly, the Plan Administrator requests that the Duplicate Claims be
disallowed and expunged, and the Remaining Claims remain on the claims register as an
outstanding liability, subject to the Plan Administrator’s right to object on any other grounds.
The claimant will suffer no prejudice because the Remaining Claims will be unaffected by the
relief sought in this Objection, and the claimant’s rights to assert the liability against the Debtors’
estates will be preserved, subject to the Plan Administrator’s right to file additional objections to
the Remaining Claims.
C. Late Filed Claims
23. With respect to each of the Late Filed Claims identified on Schedule 2 to the
Proposed Order, the Plan Administrator has reviewed the proofs of claim, including the
supporting documentation provided by the claimants, if any, and determined that the Late Filed
Claims were not timely filed. Among other things, the Bar Date Order established August 2,
2024 as the General Bar Date, and December 9, 2024 as the Governmental Bar Date. The Bar
Date Order, which governs the timeliness of proofs of claim filed in these chapter 11 cases,
further provides that any entity which failed to file a proof of claim subject to the applicable bar
date is barred from asserting such a claim against the Debtors (or successors thereto) or from
filing a proof of claim with respect thereto. Each of the Late Filed Claims was filed after the
respective bar dates.
7
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24. In addition, Article VII.F. of the Plan, provides that “any and all Proofs of Claim
Filed after the Claims Bar Date shall be deemed disallowed and expunged as of the Effective
Date…and Holders of such Claims may not receive any distribution on account of such Claims.”
25. Disallowing and expunging the Late Filed Claims set forth on Schedule 2 to the
Proposed Order is necessary to ensure that the claimants ultimately entitled to receive
distributions from the Debtors’ estates receive the appropriate treatment and distribution. In
addition, disallowing such claims is consistent with long standing Third Circuit law providing
that a bar date is a “drop-dead date” that bars all claimants who fail to timely file their claims. In
re Trans World Airlines, Inc., 96 F.3d 687, 690 (3d Cir. 1996). Accordingly, the Plan
Administrator seeks to disallow and expunge the Late Filed Claims in their entirety.
D. Insufficient Documentation Claims
26. Each of the Insufficient Documentation Claims was filed without sufficient
documentation to substantiate the claim asserted therein as required by Bankruptcy Rule 3001.
Additionally, the Plan Administrator has reviewed the Debtors’ books and records and, after
reasonable efforts, have been unable to locate any information of documentation that would
substantiate the Insufficient Documentation Claims, whether in full or in part. As a result, the
Insufficient Documentation Claims fail to provide prima facie evidence of the validity and
amount of the claims they assert, as required by section 502 of the Bankruptcy Code and
Bankruptcy Rule 3001(f).
27. Accordingly, the Plan Administrator objects to the Insufficient Documentation
Claims and requests entry of the Proposed Order disallowing and expunging each of the
Insufficient Documentation Claims, as indicated on Schedule 3 thereto.
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RESPONSES TO OBJECTION
28. Filing and Service of Responses. To contest the Objection, a claimant must file
and serve a written response to the Objection (a “Response”) so that it is received by 4:00 p.m.
(Eastern Time) on June 4, 2025 (the “Response Deadline”). A claimant who has timely filed a
Response and wishes to oppose the Objection must attend or make other plans to participate in
the hearing on the Objection, which is scheduled to be held on June 11, 2025 at 10:30 a.m.
(Eastern Time) before The Honorable Brendan L. Shannon, United States Bankruptcy Judge,
United States Bankruptcy Court for the District of Delaware, 824 N. Market Street, 6th Floor,
Courtroom No. 1, Wilmington, Delaware 19801.
29. Every Response should be filed with the Office of the Clerk, United States
Bankruptcy Court for the District of Delaware, 824 North Market Street, 3rd Floor, Wilmington,
Delaware 19801, and served on counsel for the Plan Administrator, so that the Response is
received no later than the Response Deadline at the following address:
Patrick J. Reilley, Esq.
Stacy L. Newman, Esq.
500 Delaware Avenue, Suite 600
Wilmington, DE 19801
Telephone: (302) 652-3131
Facsimile: (302) 652-3117
preilley@coleschotz.com
snewman@coleschotz.com
- and -
Matteo Percontino, Esq.
Court Plaza North, 25 Main Street
Hackensack, NJ 07601
Telephone: 201-489-8000
mpercontino@coleschotz.com
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30. Timely Response Required. If a claimant fails to file and serve a timely
Response, then, without further notice to the claimant or a hearing on the Objection, the Plan
Administrator will present the Court with an order, substantially in the form attached hereto as
Exhibit A, and the relief requested in the Objection may be granted without a hearing.
SEPARATE CONTESTED MATTER
31. To the extent that a Response is filed regarding any Disputed Claim listed in the
Objection and the Plan Administrator is unable to resolve the Response, each such claim, and the
objection by the Plan Administrator to each such claim asserted herein, shall constitute a separate
contested matter as contemplated by Bankruptcy Rule 9014. The Plan Administrator
respectfully requests that any order entered by the Court regarding the Objection shall be deemed
a separate order with respect to each Disputed Claim.
RESERVATION OF RIGHTS
32. The Plan Administrator hereby reserves his right and those of the Debtors’ estates
and any successors thereto to object further to the Disputed Claims on any additional factual or
legal grounds. Without limiting the generality of the foregoing, the Plan Administrator
specifically reserves the right to amend the Objection, file additional papers in support hereof or
take other appropriate actions, including to: (a) respond to any allegation or defense that may be
raised in a Response by or on behalf of any claimant or other party in interest; (b) object further
to any claim for which a claimant provides (or attempts to provide) additional documentation or
substantiation; and (c) object further to any claim based on additional information that may be
discovered on further review by the Plan Administrator or through discovery.
COMPLIANCE WITH LOCAL RULE 3007-1
33. To the best of the Plan Administrator’s knowledge and belief, the Objection,
including the exhibits annexed to the Proposed Order, substantially complies with Local Rule
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3007-1 and the Rule 3007(c) General Order. To the extent that the Objection does not comply
with the requirements of Local Rule 3007-1 or the Rule 3007(c) General Order, the Plan
Administrator submits that the deviations are not material and respectfully request that those
requirements be waived.
NO PRIOR REQUEST
34. No prior request for the relief sought in the Objection has been made to this or
any other court.
NOTICE
35. Notice of this Objection will be given to: (i) the U.S. Trustee; (ii) claimants whose
claims are subject to this Objection and their counsel, if known, and (iii) all parties entitled to
notice pursuant to Bankruptcy Rule 2002. The Plan Administrator submits that, under the
circumstances, no other or further notice is required.
[Remainder of Page Intentionally Left Blank]
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CONCLUSION
WHEREFORE, for the reasons stated herein, the Plan Administrator respectfully requests
that the Court enter the Proposed Order, substantially in the form attached hereto as Exhibit A,
granting the relief requested in the Objection and such other and further relief as the Court deems
just and proper.
Dated: May 8, 2025
Wilmington, Delaware
COLE SCHOTZ P.C.
/s/ Patrick J. Reilley
Patrick J. Reilley (No. 4451)
Stacy L. Newman (No. 5044)
500 Delaware Avenue, Suite 600
Wilmington, DE 19801
Telephone: (302) 652-3131
Facsimile: (302) 652-3117
preilley@coleschotz.com
snewman@coleschotz.com
- and -
Matteo Percontino, Esq. (Admitted Pro Hac Vice)
Court Plaza North, 25 Main Street
Hackensack, NJ 07601
Telephone: (201) 489-3000
Facsimile: (201) 489-1536
mpercontino@coleschotz.com
Counsel to David M. Barse, solely in his capacity as
the Plan Administrator of Vyaire Medical, Inc., et
al.
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