Cosmed Group is now in Chapter 7 liquidation after selling the operating assets associated with its three principal facilities during Chapter 11; the remaining case is a wind-down rather than a standalone reorganization. The sale path transferred the Linden, New Jersey assets to Vapos and the Erie, Pennsylvania and Franklin, New Jersey assets to Lynx Medical, after which the case converted effective August 1, 2025.
Cosmed filed Chapter 11 on November 14, 2024, as reflected in its voluntary petitionDkt. 1. The filing followed sustained liquidity pressure from hundreds of personal-injury suits alleging harm from ethylene oxide emissions, the absence of insurance coverage for those claims, more than $2 million of defense costs incurred during 2024, and projected defense spending of $4.5 million to $7 million over the following year. At the same time, newly finalized emissions rules were expected to require $2.5 million to $5 million of investment per facility. Those pressures, described in the first-day declarationDkt. 30, confronted a business with approximately $6.73 million in funded debt, secured principally by liens on substantially all assets.
The debtors initially sought authority to preserve operations through cash collateral, rather than conventional new-money financing, under the cash-collateral motionDkt. 29. The court ultimately authorized budgeted use of cash collateral with a 15% permitted variance, replacement liens and superpriority protection for the prepetition lenders, and continued payments to the senior lender under the final cash-collateral orderDkt. 111. The case later moved onto a financed Section 363 sale track, culminating in the facility sales and Chapter 7 conversion; no future operating reorganization or plan path remains indicated in the supplied record.
