Non-Compete Pact Survives Chapter 7 Discharge

Debtor Michael Capps’s former employer can enforce a covenant not to compete after his bankruptcy discharge, the U.S. Bankruptcy Court for the District of Kansas held.

Alleged violations of the agreement occurred after he filed the petition, it said.

Cybertron International Inc.'s right to enforce the restrictive covenant isn’t a claim in Capps’s bankruptcy case and wasn’t discharged or wiped out in Chapter 7, Judge Robert E. Nugent wrote July 26.

Integrated Technologies of Kansas Inc. sold its customer accounts to competitor Cybertron. Capps, who was president and controlling shareholder of Integrated, became vice president of Cybertron. As part of ...