EllDan Corp. v. Steele (In re EllDan Corp.)

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May 11, 2023
7231 Beauty Shops
812112 Beauty Salons
bankruptcy
trademark infringement, bankruptcy, franchise, noncompete agreement, summary judgment, covenant

EllDan Corp. v. Steele (In re EllDan Corp.)
2023 Bankr. LEXIS 1278; 2023 WL 3394917
US
Federal Court
Minnesota
United States Bankruptcy Court
Kesha L. Tanabe

Summary

The remaining matter in this bankruptcy adversary proceeding was whether the covenants not to compete in the prepetition franchise agreements were enforceable. The debtor rejected the franchise agreements after the petition date of the bankruptcy proceedings. The court ruled that the covenants were reasonable in duration and geographic scope under Minnesota law and public interest was not harmed. The court also found that the debtor breached the covenants the franchisor was contractually entitled to injunctive relief.
EllDan Corp. v. Steele
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See Also

Despite Rejection of Franchise Agreements in Bankruptcy, Debtor Remained Obligated Not to Compete

The remaining matter in this bankruptcy adversary proceeding was whether the covenants not to compete in the prepetition franchise agreements were enforceable. The debtor rejected the franchise agreements after the petition date of the bankruptcy proceedings. The court ruled that the covenants were reasonable in duration and geographic scope under Minnesota law and public interest was not harmed. The court also found that the debtor breached the covenants the franchisor was contractually entitled to injunctive relief.