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EOA. The primary issues in the State litigation were: (1)
Whether the defendants breached the EOA by discontinuing payments
into the sweep account, (2) whether the plaintiffs made
misrepresentations when executing the EOA, and (3) whether Henry
breached the covenant not to compete provision of the EOA.
The State litigation was tried from July 29 through August
1, 1996. Following the trial, a modified memorandum opinion and
judgment (modified judgment), dated January 3, 1997, was entered
by the State court in which the court held, among other things,
that (1) the covenant not to compete was valid and enforceable,
(2) Henry did not violate the covenant not to compete, and (3)
HJA was obligated to complete the payment obligations under the
covenant not to compete. The modified judgment was not appealed
by any of the litigants.
Pending resolution of the State litigation, HJA continued to
make payments directly on the FirsTier note and the Chevrolet
debt. On December 29, 1997, the State court entered a journal
entry pursuant to motions, filed by the defendants HJA and Abram,
for an order nunc pro tunc and for partial satisfaction of
judgment. The journal entry provided that HJA was entitled to a
credit against the covenant not to compete payments for certain
payments made by HJA on the FirsTier note and the Chevrolet debt.
The journal entry stated, in part:
IT IS THEREFORE ORDERED and DECREED as follows:
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