In re Andres Gacharna and Catherine E. Lindsay

12 B 08807

In this Chapter 13 proceeding, the Court sustained Creditors’ objection to confirmation of Debtors’ Plan, holding that the Debtors’ obligations under a Settlement Agreement with a former employer (including a non-compete clause) were non-monetary in nature, and therefore were not a "claim" for bankruptcy purposes. Only claims for money can be discharged. The Settlement Agreement included language that the non-monetary provisions of Articles 3 and 4 were the essence of the agreement and that should the Debtors fail to perform the duties prescribed in those provisions, injunctive relief would be appropriate to require the Debtors to perform the duties. The Court also noted that the provision governing attorney’s fees was not a compensation remedy, but was designed to make the prevailing party whole after the resolution of disputes.

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Date: 
Friday, October 19, 2012