In a recent decision, the United States Bankruptcy Court for the District of Massachusetts held that a debtor is not prohibited from competing with the purchaser of his former business’s assets or from treating his former business’s patients. In its decision, the Court analyzed the state of non-compete law within the bankruptcy context, finding that implied covenants not to compete are not applicable where a debtor’s assets are involuntarily sold. After determining that the debtor’s “fresh start” outweighed the trustee’s right to a recovery, the Court denied the Trustee’s request to enforce a covenant not to compete against the debtor.
Thomas H. Curran Associates represented the debtor in this precedential case. Thomas Curran, managing partner, highlights the key takeaways that can be found from this court ruling in recent article published by Massachusetts Lawyers Weekly.