Legal Question in Bankruptcy in Minnesota

Non-compete - Chapter 11 - Company Sold - Employees Terminated

I am inquiring on the validity of a non-compete employment agreement. I am employed in Minnesota by a company who has filed Chapter 11. The company was recently sold and all employees were informed they would be terminated upon the close of the sale. Employees were informed they may be offered a job from the company making the purchase or one of the companies entering into license agreements with the new company. They stated all current employment contracts (i.e. salary, bonus and commissions previously negotiated would not longer be valid and would need to be renegotiated with the new company). That said is a non-compete employment agreement still valid or does it become void?


Asked on 4/29/09, 10:19 pm

1 Answer from Attorneys
Lesley Hoenig Lesley A. Hoenig, Attorney at Law

Re: Non-compete - Chapter 11 - Company Sold - Employees Terminated

I'd highly recommend consulting with a local attorney that has dealt a bit with chapter 11s, but unless the agreement is specifically rejected, I would recommend making sure it does get rejected by the company (all contracts must be assumed or rejected in a bankruptcy setting). If it is rejected, then the agreement is no longer valid. Without more details it is impossible to say yes it is valid or no it isn't valid.

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Answered on 5/05/09, 7:03 pm


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