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Full title: Objection Objection of Life Insurance Company of North America to Notice of Intent (related document(s)17, 136, 146, 174, 564, 677) Filed by Life Insurance Company of North America (Attachments: # 1 Certificate of Service) (Wisler, Jeffrey) (Entered: 02/03/2021)

Document posted on Feb 2, 2021 in the bankruptcy, 4 pages and 0 tables.

Bankrupt11 Summary (Automatically Generated)

The Cure Objection specifically identified each of the Employee Benefits Agreements, and objected to the First Cure Notice because, inter alia, (i) it included an ambiguous reference to LINA that did not identify a specific policy; (ii) it failed to provide definitive notice of the proposed disposition of the Employee Benefits Agreements pursuant to the Sale; and (iii) it did not propose to satisfy Debtors’ cure obligations consistent with section 365(b)(1) of the Bankruptcy Code.The Notice of Intent includes the following LINA references (“LINA Listings”): 23 CIGNA (LIFE INSURANCE) Accordingly, to the extent that the Debtors seek to assume and assign any of the Employee Benefits Agreements, the Debtors must pay the full cure amounts based upon the actual amounts that are due on the date that any of the Employee Benefits Agreements are assumed and assigned by the Debtors (“Effective Date”).Any order permitting the assumption and assignment of any Employee Benefits Agreements must direct that the Debtors fully pay all amounts due to LINA under those agreements as of the Effective Date, as a condition precedent to such assumption and assignment.WHEREFORE, LINA respectfully requests that this Court: (i) approve assumption and assignment of the Employee Benefits Agreements only to the extent consistent with the foregoing; and (ii) grant such further relief to LINA as this Court deems just and equitable.

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UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re ) Chapter 11 ) Case No. 20-12841 (MFW) YouFit Health Clubs, LLC, et al., ) (Jointly Administered) ) Debtors. ) Re: Docket Nos. 17, 136, 146, 174, 564, 677 OBJECTION OF LIFE INSURANCE COMPANY OF NORTH AMERICA TO NOTICE OF INTENT Life Insurance Company of North America (“LINA”), by and through its undersigned counsel, hereby objects to the Notice of Intent to Assume and Assign Executory Contracts and Unexpired Leases [D.I. 677] (“Notice of Intent”). In support of this Objection, LINA states as follows: BACKGROUND 1. LINA and the above-captioned debtors (“Debtors”) are parties to the following group insurance policies (collectively, the “Employee Benefits Agreements”) through which LINA provides benefits to Debtors’ employees:  Group Accident Policy (OK 970401), as amended, effective 4/1/2019.  Group Life Policy (FLX 968935), as amended, effective 4/1/2019.  Group Long-Term Disability Policy (LK 965984), as amended, effective 4/1/2019. 2. On November 9, 2020, Debtors filed the Debtor’s Motion for Entry of Orders (I)(A) Establishing Bidding Procedures Relating to the Sale of the Debtors’ Assets, (B) Approving the Debtors’ Entry into the Stalking Horse Purchase Agreement, (C) Establishing Procedures Relating to the Assumption and Assignment of Certain Executory Contracts and Unexpired Leases, (D) Approving Form and Manner of Notices Relating Thereto, and (E) Scheduling a Hearing to Consider the Proposed Sale; (II)(A) Approving the Sale of the Debtors’ Assets Free and Clear of Liens, Claims, Encumbrances, and Interests, and (B) Authorizing the

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Assumption and Assignment of Certain Executory Contracts and Unexpired Leases; and (III) Granting Related Relief [D.I. 17] (“Sale Motion”) seeking this Court’s approval of the sale of their assets (“Sale”) to a buyer. 3. On November 23, 2020, this Court entered the Order Establishing Bidding Procedures and Granting Related Relief [D.I. 136] (“Procedures Order”). 4. Pursuant to the Procedures Order, the Debtors filed the Notice of Potential Assumption and Assignment [D.I. 146] (“First Cure Notice”) on November 25, 2020. 5. On December 2, 2020, LINA filed the Objection of Cigna to Notice of Potential Assumption and Assignment [D.I. 174] (“Cure Objection”). The Cure Objection specifically identified each of the Employee Benefits Agreements, and objected to the First Cure Notice because, inter alia, (i) it included an ambiguous reference to LINA that did not identify a specific policy; (ii) it failed to provide definitive notice of the proposed disposition of the Employee Benefits Agreements pursuant to the Sale; and (iii) it did not propose to satisfy Debtors’ cure obligations consistent with section 365(b)(1) of the Bankruptcy Code. 6. On December 28, 2020, this Court entered the Order (I) Authorizing the Sale of All of the Debtors’ Assets Free and Clear of Liens, Claims, Encumbrances, and Other Interests, (II) Authorizing and Approving the Debtors’ Performance Under the Stalking Horse Purchase Agreement, (III) Approving the Assumption and Assignment of Certain of the Debtors’ Executory Contracts and Unexpired Leases Related Thereto and (IV) Granting Relate Relief [D.I. 564] (“Sale Order”). The Sale Order preserved all of LINA’s rights under the Cure Objection. 7. On January 21, 2021, the Debtors filed the Notice of Intent. The Notice of Intent includes the following LINA references (“LINA Listings”): 23 CIGNA (LIFE INSURANCE) YOUFIT HEALTH CLUBS, LLC NON-LEASE CONTRACT/AGREEMENT $0.00 EMP BENEF – INSURANCE

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79 LINA YOUFIT HEALTH CLUBS, LLC NON-LEASE CONTRACT/AGREEMENT $0.00 EMP BENEF The Notice of Intent includes no other LINA references. OBJECTION 8. LINA objects to the Notice of Intent because, inter alia, (i) it includes ambiguous references that do not identify a specific Employee Benefit Agreement; and (ii) it does not propose to satisfy Debtors’ cure obligations consistent with section 365(b)(1) of the Bankruptcy Code. A. LINA Listings. 9. Although the LINA Listings appear to reference one or more of the Employee Benefits Agreements, the Notice of Intent does not specifically identify any of the Employee Benefits Agreements. To the extent that the Debtors seek to assume and assign any of the Employee Benefits Agreements, they must clarify their intent by specifically identifying the Employee Benefits Agreements they seek to assume and assign. Pending clarification, LINA reserves all of its rights. B. Cure. 10. When a contract is assumed under section 365 of the Bankruptcy Code, the non-debtor third-party to that contract must be “made whole at the time of the debtor’s assumption of the contract.” In re Entertainment, Inc., 223 B.R. 141, 151 (Bankr. N.D. Ill. 1998). Accordingly, to the extent that the Debtors seek to assume and assign any of the Employee Benefits Agreements, the Debtors must pay the full cure amounts based upon the actual amounts that are due on the date that any of the Employee Benefits Agreements are assumed and assigned by the Debtors (“Effective Date”). See 11 U.S.C. § 365(b)(1).

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11. Amounts due under the Employee Benefits Agreements vary, and are subject to reconciliation based upon, among other things, eligibility reports submitted by the Debtors. Cure amounts must be based on the amount due on the Effective Date, rendering any amount set forth in the Notice of Intent stale and potentially inaccurate. 12. LINA expressly objects to the proposed cure amount of $0 in the Notice of Intent as insufficient. As of January 1, 2021, $15,903.06 was due and owing from Debtors to LINA under the Employee Benefits Agreements. In addition, amounts will continue to become due and owing to LINA under the Employee Benefits Agreements on and after January 1, 2021, and no cure amount can be fixed prior to the Effective Date. 13. Any order permitting the assumption and assignment of any Employee Benefits Agreements must direct that the Debtors fully pay all amounts due to LINA under those agreements as of the Effective Date, as a condition precedent to such assumption and assignment. WHEREFORE, LINA respectfully requests that this Court: (i) approve assumption and assignment of the Employee Benefits Agreements only to the extent consistent with the foregoing; and (ii) grant such further relief to LINA as this Court deems just and equitable. Dated: February 3, 2021 CONNOLLY GALLAGHER LLP /s/ Jeffrey C. Wisler Jeffrey C. Wisler (#2795) 1201 North Market Street, 20th Floor Wilmington, DE 19801 Telephone: (302) 757-7300 Facsimile: (302) 658-0380 jwisler@connollygallagher.com Counsel for Life Insurance Company of North America #05587849