Courts have expressed varying views on whether covenants not to compete are enforceable against debtors in bankruptcy. A review of the varying case law on the subject demonstrates that at least two fundamental disagreements have arisen. First, courts disagree on whether a debtor can discharge its obligations under a non-compete by rejecting it as an executory contract under 11 U.S.C. § 365. Second, courts disagree on whether a debtor’s obligations under a non-compete are dischargeable debts within the meaning of 11 U.S.C. § 101(12).
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