Covenant Not to Compete

When a business is sold, there is often an allocation of a portion of the purchase price to a covenant not to compete. While this allocation may be appropriate in the sale of a business, frequently the allocation is artificial and is a behind-closed-doors deal between buyers and sellers, driven entirely by tax considerations. Such allocations may have unwanted and unintended consequences for a divorcing party.

16 minute read October 01, 2004 at 10:38 AM
By
Suzanne Harris And Noel Applebaum
Covenant Not to Compete

When a business is sold, there is often an allocation of a portion of the purchase price to a covenant not to compete.

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