Ask a Lawyer - Archive

I have non-compete for 2 years in the job I am in right now. The company has lost their distributorship and it has been offered to me. I will add that in the next month liquidation process for the company I work for will begin. I will be unemployed and the business I work for will be disolved.

My question is can I open a company before it closes and accept the distributorship or should I open a company under someone else name,accept the distributorship and have a job when the comapny closes?

Your employer could certainly try to enforce the non-compete, but it would be an expensive proposition in filing a lawsuit and incurring all the legal fees to try to get an injunction against you. It is a risk you have to weigh in terms of whether or not the company perceives you as a competative threat and would then have enough money to pursue the matter. A bigger concern could be if the company would assign their rights under the non-compete to a new distributor (other than yourself) who might try to come in and buy the business if you do not do so. There may also be bigger issues on the horizon such as potential successor liability for debts of the business if you take operations over while it is insolvent. Setting up a new business entity and concurrently trying to negotiate your way out of any contingent liability on the non-compete may be the best way to go. You really should hire a business attorney to advise and counsel you throught the process.