Non-Compete Breaches Can Survive Bankruptcy

In a recent court case in Kansas, the court stated that a breach of a non-compete agreement that occurred after the filing of a bankruptcy was not erased by the bankruptcy. The ruling came from a case between Michael Capps and Cybertron International Inc., in which Capps was claiming that his bankruptcy removed the repercussions of breaching the non-compete when writing it off as a debt claim in his chapter 7 filing. The court ruled against Capps for multiple reasons. The breach of his non-compete occurred after his petition for bankruptcy and, more importantly, the non-compete breach fee is not claimable as a debt in a bankruptcy.

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