Just Funky, LLC v. Boom Trendz, LLC, 5:21-cv-01127

Just Funky, LLC, a company manufacturing licensed pop culture consumer products, employed Melissa Carpenter under agreements containing non-disclosure, non-compete, and non-solicitation provisions.
Upon termination in 2019, Carpenter signed a Separation Agreement reaffirming her prior restrictive covenants for 24 months.
After her termination, Carpenter (with Deepak Tyagi) formed Boom Trendz, a competing business that worked with Just Funky’s clients.
Just Funky sued Carpenter, Boom Trendz, and Tyagi alleging trade secret misappropriation, unfair competition, breach of contract, and tortious interference.
During litigation, Carpenter filed for Chapter 7 bankruptcy and obtained a discharge on August 17, 2023; Just Funky failed to seek any exception for its claims in the bankruptcy court.
Carpenter moved for summary judgment, asserting that her bankruptcy discharge bars all claims against her, and that the restrictive covenants had expired and were enforced via a preliminary injunction during their effective period.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Effect of bankruptcy on claims	Bankruptcy does not bar all potential debt; believes claims are nondischargeable for willful conduct	Bankruptcy discharge covers all plaintiff's claims; no timely objection filed in bankruptcy	Claims are barred by bankruptcy discharge; no timely adversary complaint filed
Enforcement of restrictive covenants	Entitled to damages for violation after period	Plaintiff received benefit via injunction; covenants now expired	Covenants enforced via injunction; no further remedy available
Right to monetary and injunctive relief post-discharge	Can separately obtain damages and injunctions	All forms of relief are barred by discharge, including injunctions	All forms of relief (monetary/equitable) are barred by discharge
Preservation of claims in bankruptcy	Can seek exception after the fact	Plaintiff had notice but took no timely action in bankruptcy	Failure to timely act waives claim; claims discharged

Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standard under Fed. R. Civ. P. 56)
Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (test for genuine issues of material fact on summary judgment)
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (burden for summary judgment and standard for non-moving party)
Neely v. Murchison, 815 F.2d 345 (burden on creditor to seek exception to bankruptcy discharge for willful and malicious injury)
In re Price, 871 F.2d 97 (obligation of creditor to act for nondischargeability of debts in bankruptcy)