Wheel Pros, LLC v. ASR Motorsport, LLC et al

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
Wheel Pros, LLC,
Plaintiff,
-v-
ASR Motorsport, LLC, Nicholas Lanzello, Reza Noori,
Joseph Leahy, David Palacios, John Thompson, III, and
Danny Huallanca,
Defendants.
2:25-cv-929
(NJC) (ARL)
SEALED
OPINION, ORDER AND CLARIFIED PRELIMINARY INJUNCTION
NUSRAT J. CHOUDHURY, United States District Judge:
Plaintiff Wheel Pros, LLC (“Wheel Pros”) brings this action against Defendants ASR
Motorsport, LLC (“ASR Motorsport”), Nicholas Lanzello, Reza Noori, Joseph Leahy, David
Palacios, John Thompson III, and Danny Huallanca (collectively, “Defendants”)1 to stop them
from allegedly stealing and misappropriating confidential, proprietary, and trade secret
information from Wheel Pros, and to prevent them from soliciting Wheel Pros’ clients and
employees, in violation of various agreements between the parties. (Am Compl. ¶¶ 146–211,
ECF No. 23.) Following Wheel Pros’ filing of a motion for a preliminary injunction, I held a
two-day evidentiary hearing in July 2025 and received multiple rounds of briefing from the
parties prior to and following the hearing. (See ECF Nos. 24–26, 28–29, 35, 48, 50.) On October
2, 2025, I granted in part Wheel Pros’ motion for a preliminary injunction. (ECF No. 61, (“PI
Order”).) Defendants both appealed the PI Order (ECF No. 62) and filed a Motion to Stay the PI
1 Lanzello, Noori, Leahy, Palacios, Thompson, and Huallanca are also referred to collectively as
the “Individual Defendants.”
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Order Pending Appeal (Mot. to Stay, ECF No. 63, Mem. in Supp., ECF No. 63-1 (“Motion”)).
Wheel Pros also subsequently appealed the PI Order. (ECF No. 71.)
Before the Court is the fully-briefed Motion, in which Defendants argue that the PI Order
should be stayed or altered pending the resolution of Defendants’ appeal. Defendants fail to meet
their heavy burden to secure a stay of the PI Order for three principal reasons.
First, Defendants fail to show that they are likely to succeed on their arguments that the
Court erred in enjoining Lanzello from violating the restrictive covenants in the Unit Grant
Agreement, as they largely repeat verbatim arguments that the Court considered and rejected in
the PI Order. Contrary to Defendants’ contentions, the restrictive covenants are enforceable
because Lanzello received two forms of consideration in exchange, because the temporal and
geographic scope of the restrictions, considered together, are reasonable under Delaware law,
and because Wheel Pros’ Amended Joint Prepackaged Plan of Reorganization (“Reorganization
Plan”), pursuant to Chapter 11 of the U.S. Bankruptcy Code, did not cancel the restrictive
covenants. Contrary to Defendants’ contentions, Lanzello’s breach of the restrictive covenants
long before Wheel Pros’ reorganization in bankruptcy automatically cancelled the equity
interests granted to him by the Unit Grant Agreement. As a result, the provisions of Wheel Pros’
Reorganization Plan addressing the treatment of “Existing Equity Interests” is inapplicable to the
Unit Grant Agreement.
Second, Defendants do not demonstrate a likelihood of success on their claim that the PI
Order fails to adequately describe the proscribed conduct as required by Rule 65(d), Fed. R. Civ.
P. The PI Order not only includes the definitions of both “Confidential Information” and
“Developments” drawn from the Individual Defendants’ Non-Disclosure Agreements, but it also
details the specific categories of Confidential Information that the Individual Defendants
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disclosed in violation of their Non-Disclosure Agreements and where such information is
described or located in the record. Moreover, consistent with the spirit of the PI Order, the Court
clarifies in this Opinion and Order the definitions of the “Confidential Information” that
Defendants must destroy and are preliminarily enjoined from disseminating, among other things,
and “Developments” that Defendants are preliminarily enjoined from “marketing, selling,
exploiting, assigning, or otherwise exercising any rights of ownership or control” as set forth in
the PI Order.
Third, the balance of equities strongly weighs against a stay because the terms of the
preliminary injunction, as clarified below, will not cause Defendants any irreparable harm. By
contrast, a stay will cause Wheel Pros irreparable harm from the substantial and ongoing risk that
Defendants will continue to disseminate and impair the value of Wheel Pros’ trade secrets and
engage in conduct that threatens the loss of customer goodwill, including by soliciting Wheel
Pros’ customers and employees to expedite ASR Motorsport’s entry into markets across the
country and the entry of certain products to market, in violation of the Individual Defendants’
agreements with Wheel Pros. The Court has fully considered the hardship that Lanzello may
experience from being preliminarily enjoined from violating the restrictive covenants in the Unit
Grant Agreement through his continued competition with Wheel Pros as president of ASR
Motorsport. However, any such hardship is the result of the non-compete agreement into which
Lanzello voluntarily entered by exercising his right to freedom of contract and in exchange for
significant consideration. The public interest is advanced by enforcing the Individual
Defendants’ agreements with Wheel Pros, and the tailored preliminary injunctive relief fashioned
by the Court merely requires Defendants to compete with Wheel Pros on terms that are
consistent with their contractual obligations.
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Finally, the Court declines Defendants’ invitation to modify the PI Order to allow
Lanzello to continue serve as ASR Motorsport’s president for an additional period of time. Since
the initiation of this action nearly one year ago in February 2025, Wheel Pros has sought a
temporary restraining order and preliminary injunction enforcing the non-compete restrictions of
the Unit Grant Agreement by enjoining Lanzello from working for ASR Motorsport while this
litigation is pending. The enforceability of the non-compete provision was a central focus of the
July 2025 hearing on Wheel Pros’ motion for a preliminary injunction and the parties’ substantial
briefing before and after the hearing. By the time the PI order was issued in October 2025, ASR
Motorsport had ample time—nearly eight months—to plan for an orderly transition to comply
with the preliminary injunction enjoining Lanzello from working as ASR Motorsport’s president
in violation of his contractual obligations. Further time is not warranted.
BACKGROUND
The Court assumes the parties’ familiarity with the factual record, procedural history, and
this Court’s prior rulings and thus only recounts the procedural background that is relevant to
resolving Defendants’ Motion.
On May 16, 2025, Wheel Pros moved for a preliminary injunction, seeking immediate
relief from Defendants’ alleged widespread use of Wheel Pros’ confidential information and
trade secrets and violations of non-compete and non-solicitation agreements between Wheel Pros
and the Individual Defendants. (Mot. for Prelim. Injunction, ECF. No. 24; Mem. in Supp., ECF
No. 25-2 (“PI Motion.”) The Court held an evidentiary hearing on July 10 and 11, 2025 and
required the filing of supplemental briefing. (See Elec. Order, Jul. 10, 2025; Elec. Order, Jul. 13,
2025.)
On October 2, 2025, the Court issued the PI Order, which granted the PI Motion in-part.
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(ECF No. 61.) Specifically, the Court ordered the following preliminary injunctive relief:
(1) Defendants are enjoined from using, disclosing, accessing, reviewing or transferring any
confidential, proprietary or trade secret information relating to Wheel Pros’ business,
including Confidential Information as defined in any written agreement between Wheel
Pros and any Individual Defendant, including without limitation, the Non-Disclosure
Agreements executed by Lanzello, Noori, Leahy, Palacios, Thompson, and Huallanca.
(2) Lanzello is enjoined from owning, managing, controlling, or participating in (as an
employee, consultant or otherwise) any business or entity which directly or indirectly
engages in the Business (as defined in the Unit Grant Agreement), including ASR
Motorsport, in accordance with the terms set forth in the Unit Grant Agreement.
(3) Lanzello is enjoined from directly or indirectly soliciting, hiring, retaining or engaging
any Company Employees (as defined in the Unit Grant Agreement) in accordance with
the terms of the Unit Grant Agreement, or engaging in any solicitation in violation of the
Unit Grant Agreement, for the duration of the applicable restrictions set forth in
Lanzello’s Unit Grant Agreement.
(4) Defendants shall destroy and dispossess themselves of any of Wheel Pros’ sensitive,
proprietary, and confidential information, or other Wheel Pros’ Confidential Information
(as defined in the Individual Defendants’ Non-Disclosure Agreements), or any
derivations thereof, which Defendants still possess or control, subject to supervision and
verification by a neutral third party.
(5) Defendants are enjoined from marketing, selling, exploiting, assigning, or otherwise
exercising any rights of ownership or control with respect to all “Developments,” as
defined in the respective Individual Defendants’ Non-Disclosure Agreements, including,
but not limited to, aftermarket wheels and automotive accessories, created or contributed
to, in whole or in part, by any Individual Defendant while employed by Wheel Pros that
relate to Wheel Pros’ business, or result from or are suggested by any work performed for
Wheel Pros.
(PI Order at 55–56.) The PI Order sets forth factual findings supporting the issuance of the
preliminary injunction (PI Order at 4–16, 24–55) as well as legal conclusions (id. at 24–55).
On October 6, 2025, Defendants appealed the PI Order. (ECF No. 62). Several days later,
on October 8, 2025, Defendants filed a Motion to Stay the Preliminary Injunction Pending
Appeal. (ECF No. 63.) Defendants contend that the restrictive covenants in the Unit Grant
Agreement enforced by the PI Order are not enforceable because: (1) the agreement was
cancelled in bankruptcy and, (2) the restrictive covenants were not supported by adequate
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consideration and are too broad in scope. (Motion at 5–19.) They also argue that the PI Order
lacks the detail required by Rule 65(d) in that it refers to extrinsic documents for the definitions
of the terms “Confidential Information” and “Developments.” (Id. at 19–23.) Last, Defendants
argue that Wheel Pros will not be injured by a stay and that a stay pending appeal will not harm
the public interest. (Id. at 22–25.) As an alternative to a stay, Defendants request that the
injunction be modified to allow Lanzello to return to his role as President at ASR Motorsport for
“a short period of time” in order to help find a successor to lead the company for the duration of
the preliminary injunction. (Id. at 25.)
Wheel Pros opposed the Motion, arguing that Defendants have not met their
“exceptionally heavy” burden to justify a stay of the PI Order for two principal reasons. (Wheel
Pros’ Mem. of Law in Opp. to Defs.’ Mot. to Stay Pending App., ECF No. 65 (“Opposition”) at
2–3.) It argues that Defendants have not shown a likelihood of success on the merits of the
appeal because the Reorganization Plan did not cancel the restrictive covenants set forth in the
Unit Grant Agreement, which was an executory contract supported by adequate consideration,
and the restrictive covenants are reasonable in geographic and temporal scope. (Id. at 5–13.) It
further argues that excusing Lanzello’s violation of the restrictive covenants because of Wheel
Pros’ reorganization would “deeply offend notions of equity and fairness.” (Id. at 8.) Wheel Pros
also contends that the balance of equities weighs against a stay because Wheel Pros would be
irreparably harmed absent the preliminary injunction, the public interest weighs against a stay,
and Defendants fail to demonstrate any irreparable harm that is “actual and immediate” rather
than “speculative.” (Id. at 3–5, 16–18.) Finally, Wheel Pros points to text in the PI Order that
provides sufficient definition of the terms “Confidential Information” and “Developments” and
argues that permitting Lanzello to return to ASR Motorsport is inconsistent with the spirit of the
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PI Order, and that therefore even a temporary stay is not warranted. (Id. at 13–16.)
On October 20, 2025, the Court requested supplemental briefing on the following issues:
(1) whether the Unit Grant Agreement is an “executory contract” in light of Wheel
Pros, LLC’s Amended Joint Prepackaged Plan of Reorganization (“Reorganization
Plan”) and (ECF No. 48-6);
(2) whether the Unit Grant Agreement should be understood as an “incentive and
retentions plan[]” or any other type of Compensation and Benefits Program as defined
in the Reorganization Plan (ECF No. 48-6);
(3) whether the Unit Grant Agreement, in its entirety, was cancelled by any provision
of the Reorganization Plan, including but not limited to Section G, Cancellation of
Existing Securities, Agreements, and Interests of Article V of the Reorganization
Plan; and
(4) whether, even if the Unit Grant Agreement’s grant of equity interests to Lanzello
was cancelled by the Reorganization Plan, the Agreement’s non-compete provision
should nevertheless be enforced in the interests of equity.
(Elec. Order, Oct. 20, 2025.)
On October 27, 2025, the parties submitted supplemental briefs in response. (Defs. Supp.
Mem. of Law on Force and Effect of Unit Grant Agreement (“Defendants’ Supplement”), ECF
No. 68; Wheel Pros’ Supp. Mem. of Law in Opp. to Defs. Mot. to Stay Pending App. (“Wheel
Pros’ Supplement”), ECF No. 67.) The Court permitted both parties to file replies to the
supplemental briefs, which were filed on October 31, 2025. (ECF Nos. 69 & 70.)
LEGAL STANDARDS
Rule 65(d) of the Federal Rules of Civil Procedure, which governs the content and scope
of injunctions and restraining orders, requires that every injunction “describe in reasonable
detail—and not by referring to the complaint or other document—the act or acts restrained or
required.” Fed. Civ. R. P. 65(d) (“Rule 65(d)”). “To comply with the specificity and clarity
requirements” of Rule 65(d), “an injunction must be specific and definite enough to apprise those
within its scope of the conduct that is being proscribed.” Fed. Trade Comm’n v. Shkreli, No. 22-
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728, 2024 WL 1026010, at *3 (2d Cir. Jan. 23, 2024), cert. denied, 145 S. Ct. 171 (2024)
(quoting S.C. Johnson & Son, Inc. v. Clorox Co., 241 F.3d 232, 240–41 (2d Cir. 2001)).
This Court analyzes a motion to stay a preliminary injunction pending appeal under Fed.
R. Civ. P Rule 62(d) (“Rule 62(d)”). The rule provides that “[w]hile an appeal is pending from
an interlocutory order or final judgment that grants, continues, modifies, refuses, dissolves, or
refuses to dissolve or modify an injunction, the court may suspend, modify, restore, or grant an
injunction on terms for bond or other terms that secure the opposing party’s rights.” While “the
plain[] text of Rule 62(d) suggests that district courts retain the power to modify a preliminary
injunction even after it has been appealed, ‘[t]his rule has been narrowly interpreted to allow
district courts to grant only such relief as may be necessary to preserve the status quo pending an
appeal where the consent of the court of appeals has not been obtained.’” Gen. Mills, Inc. v.
Champion Petfoods USA, Inc., No. 20-cv-181, 2020 WL 915824, at *2 (S.D.N.Y. Feb. 26, 2020)
(quoting Vasile v. Dean Witter Reynolds, Inc., 205 F.3d 1327 (Table) (2d Cir. 2000)). 2 The
court’s power to preserve the status quo generally “includes the power to clarify the terms of an
injunction,” but the court’s clarifications may not go so far as to “alter the posture of the case on
appeal.” Flatiron Health, Inc. v. Carson, 602 F. Supp. 3d 482, 486 (S.D.N.Y. 2020) (citing Ideal
Toy Corp. v. Sayco Doll Corp., 302 F.2d 623, 625 (2d Cir. 1962)). Once an order has been
appealed, “jurisdiction passes to the appellate court.” Ideal Toy Corp., 302 F.2d at 625 (2d Cir.
1962). Thus, any orders clarifying the terms of an injunction must be “consistent with the spirit”
of the original injunction. Flatiron Health, Inc., 602 F. Supp. 3d 482, 486 (S.D.N.Y. 2020)
(quoting States v. Spectrum Brands, Inc., No. 15-cv-371, 2018 WL 502736, at *1, 3 (W.D. Wis.
2 Unless otherwise indicated, case quotations omit all internal quotation marks, brackets,
alterations, and citations.
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Jan 19, 2018)).
“When modifying a preliminary injunction, a court is charged with the exercise of the
same discretion it exercised in granting or denying injunctive relief in the first place.” Sierra
Club v. U.S. Army Corps of Eng’rs, 732 F.2d 253, 256 (2d Cir. 1984); see also Dist. Attorney of
New York Cty. v. Republic of Phil., 681 F. App’x 37, 41 (2d Cir. 2016) (explaining that “[t]he
same standard applies to modification of an injunction” as to the initial grant of a preliminary
injunction).
Further, a “stay is not a matter of right, even if irreparable injury might otherwise result.”
Sarr v. Garland, 50 F.4th 326, 334–35 (2d Cir. 2022) (quoting Nken v. Holder, 556 U.S. 418,
433–34 (2009)). Rather, a stay is “an exercise of judicial discretion,” id., and “[t]he propriety of
its issue is dependent upon the circumstances of the particular case.” Virginian Ry. Co. v. United
States, 272 U.S. 658, 672–673 (1926). “The party requesting a stay bears the burden of showing
that the circumstances justify an exercise of [the Court’s] discretion.” Mahdawi v. Trump, 136
F.4th 443, 449 (2d Cir. 2025) (quoting Nken, 556 U.S. at 433–34).
The Second Circuit has directed courts to consider four factors in determining whether to
issue a stay:
(1) whether the stay applicant has made a strong showing that he is likely to succeed on
the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether
issuance of the stay will substantially injure the other parties interested in the proceeding;
and (4) where the public interest lies.
Mahdawi, 136 F.4th at 449; see also Leroy v. Hume, 563 F. Supp. 3d 22, 25 (E.D.N.Y. 2021)
(reciting the same factors). The first two factors—a strong showing of likelihood of success on
the merits and irreparable injury absent a stay—are the “most critical.” Mahdawi, 136 F.4th at
449. The factors as a whole, however, are treated “somewhat like a sliding scale,” in that “more
of one [factor] excuses less of the other.” Thapa v. Gonzales, 460 F.3d 323, 334 (2d Cir. 2006)
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see also Gen. Mills, Inc., 2020 WL 915824, at *2 (S.D.N.Y. Feb. 26, 2020). The movant bears a
heavy burden when seeking a stay of a preliminary injunction because the stay factors “overlap[]
substantially” with the factors considered before issuing a preliminary injunction. Citigroup
Glob. Markets, Inc. v. VCG Special Opportunities Master Fund Ltd., 598 F.3d 30, 37 (2d Cir.
2010). Thus, absent any new facts or developments, a request to stay a preliminary injunction
“will almost always be logically inconsistent with a prior finding of irreparable harm that is
imminent as required to sustain the same preliminary injunction.” Rodriguez ex rel. Rodriguez v.
DeBuono, 175 F.3d 227, 235 (2d Cir. 1999).
DISCUSSION
Defendants fail to meet their heavy burden to secure a stay of the preliminary injunction
because they do not make the required strong showing that they are likely to succeed on the
merits of their arguments on appeal, that they will suffer irreparable harm, that Wheel Pros will
not be irreparably harmed by a stay, or that the public interest favors a stay. First, Defendants’
contention that the Court erred in issuing a preliminarily injunction barring Lanzello from
violating the restrictive covenants in the Unit Grant Agreement is largely based on near verbatim
repetition of arguments considered and rejected in the PI Order. The restrictive covenants are
enforceable, however, because Lanzello was provided two forms of consideration in exchange
and because the temporal and geographic scope of the restrictions, considered holistically, are
reasonable under Delaware law. Further, the restrictive covenants remain enforceable
notwithstanding Wheel Pros’ Reorganization Plan. The Reorganization Plan provisions
addressing the treatment of “Existing Equity Interests” do not apply to the Unit Grant Agreement
because, before the Reorganization Plan went into effect, the equity interests Lanzello received
through the agreement had been automatically cancelled pursuant to the agreement’s terms due
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to his repeated breaches of the restrictive covenants and his ultimate termination for cause on
November 20, 2024. Defendants are thus unlikely to succeed on their argument that Wheel Pros
cannot enforce the restrictive covenants in this litigation.
Second, Defendants do not demonstrate a likelihood of success on their claim that the PI
Order fails to describe the proscribed conduct with sufficient specificity as required by Rule
65(d). The PI Order includes the definitions of both “Confidential Information” and
“Developments” drawn from the Individual Defendants’ Non-Disclosure Agreements in its
factual findings and legal conclusions. More importantly, the PI Order identifies specific
categories of Confidential Information that the Individual Defendants disclosed in violation of
their Non-Disclosure Agreements and where such information is described or located in the
record, providing adequate notice to Defendants of the specific information that they are required
to destroy and are enjoined from using, disclosing, accessing, reviewing, and transferring.
Moreover, consistent with the spirit of the PI Order, the Court clarifies below the definition of
the “Confidential Information” that Defendants must destroy and are preliminarily enjoined from
disseminating, among other things, and the “Developments” that Defendants are preliminarily
enjoined from “marketing, selling, exploiting, assigning, or otherwise exercising any rights of
ownership or control” under the PI Order. Accordingly, Defendants fail to show a likelihood of
success in their claim that the Court’s preliminary injunction fails to provide explicit notice of
the precise enjoined conduct as required by Rule 65(d).
Third, for the same reasons, Defendants fail to show that they will experience any
irreparable harm absent a stay of the preliminary injunction. Defendants’ concern that they may
unintentionally violate the terms of the PI Order is addressed through the clarification provided
below, which is consistent with the spirit of the PI Order itself. Moreover, the Court has fully
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considered any hardship that Lanzello may experience from being preliminarily enjoined from
violating the restrictive covenants in the Unit Grant Agreement, which prevent him from serving
as the president of ASR Motorsport—a direct competitor to Wheel Pros that he helped found
while still employed by Wheel Pros. Lanzello voluntarily entered into the restrictive covenants
and, in exchange, received significant consideration in the form of both equity interests and
continued employment with Wheel Pros at an executive level accompanied by significant
compensation. Because those restrictions are enforceable, any hardship that Lanzello may
experience is the result of his own decisions and conduct—not the PI Order. Moreover,
Defendants fail to show that Lanzello’s departure from ASR Motorsport will cause irreparable
harm where the company has had nearly eight months since the filing of Wheel Pros’
preliminary injunction motion in February 2025 and the issuance of the PI Order—more than
sufficient time to determine how to reallocate Lanzello’s duties.
Fourth, as this Court found in the PI Order, Wheel Pros will be substantially injured by
any stay of the preliminary injunction. Defendants have already disseminated Wheel Pros’
confidential information to a wider audience. I have found a substantial and ongoing risk that,
absent preliminary injunctive relief, Defendants will continue to do so in order to expedite ASR
Motorsport’s entry into different wheel markets across the country and the entry of certain
products to market. Moreover, Lanzello’s direct competition with Wheel Pros has already caused
Wheel Pros to lose a business relationship and goodwill with at least one customer—Rayco II,
World of Spoilers, Inc. (“Rayco”)—and risks causing the continued loss of business relationships
and goodwill with other customers. A stay of the PI Order would permit such misconduct to
continue, causing Wheel Pros further irreparable harm.
Fifth, staying the preliminary injunction does not serve the public interest. As I found in
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the PI Order, a tailored preliminary injunction is necessary to address the ongoing and substantial
risk that Defendants will continue to disseminate and impair the value of Wheel Pros’ trade
secrets and engage in conduct that threatens the loss of customer goodwill, including by
soliciting employees and customers in violation of the Individual Defendants’ agreements with
Wheel Pros and through Lanzello’s continued competition with Wheel Pros as ASR
Motorsport’s president. Allowing such conduct to continue does not serve the public, while
enforcing the Individual Defendants’ freedom to contract is in the public interest. Moreover, the
tailored preliminary injunctive relief fashioned in the PI Order does not prohibit competition
against Wheel Pros; it merely requires Defendants to compete with Wheel Pros on terms that are
consistent with their contractual obligations.
Finally, for the reasons explained below, I do not modify the PI Order to allow Lanzello
to continue serve as ASR Motorsport’s president for any additional period of time. After the
filing of Wheel Pros’ preliminary injunction motion, which sought to enforce Lanzello’s non-
compete agreement with Wheel Pros, ASR Motorsport and Lanzello had nearly eight months—
more than ample time—to plan for an orderly transition in the event the motion was granted.
More than three months have passed since the October 2, 2025 PI Order was issued. Defendants
fail to show that ASR Motorsport or Lanzello need any additional time to allocate Lanzello’s
duties to other staff.
I. 	Motion to Stay the Preliminary Injunction
a. 	Likelihood of Success on the Merits
Defendants argue that their appeal of the PI Order is likely to succeed on the merits for
two reasons. First, according to Defendants, the Court erred in enjoining Lanzello from violating
the restrictive covenants set forth in the Unit Grant Agreement because they are unenforceable.
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(Motion at 6–19.) Defendants contend that the Unit Agreement was cancelled in its entirety
during the reorganization of Wheel Pros in bankruptcy proceedings. (Id. at 6–7 (citing Plan of
Reorganization, In re Wheel Pros, LLC, No. 24-11939 (ECF No. 214) at 32 (Bankr. D. Del. Oct.
13, 2024) (the “Reorganization Plan”).) Defendants further argue that the Unit Grant Agreement
is unenforceable because Lanzello did not receive adequate consideration for his agreement to be
bound by its terms and because the restrictive covenants are unreasonable in geographic scope
and temporal duration. (Id. at 8–19). Second, Defendants argue they are likely to succeed in their
appeal of the preliminary injunction because the PI Order fails to satisfy Rule 65(d)(1)(C), Fed.
R. Civ. P., which requires the Court to describe the enjoined conduct with sufficient detail and
particularity. (Id. at 19–22.)
For the reasons explained below, Defendants have not shown that they are likely to
succeed on the merits of their appeal because the Unit Grant Agreement’s restrictive covenants
are enforceable and the PI Order meets the requirements of Rule 65.
i. 	The Unit Grant Agreement’s Restrictive Covenants
Lanzello’s Unit Grant Agreement includes the following restrictive covenants:
During the period of Executive’s3 employment with [Wheel Pros] the Partnership,
Employer or any of their respective Subsidiaries and for five (5) years following
any Separation, Executive shall not, directly or indirectly, own any interest in,
manage, control, participate in (whether as an owner, operator, manager,
consultant, officer, director, employee, investor, agent, representative or
otherwise), consult with, render services for or otherwise engage in any business
or entity which directly or indirectly competes with the business of supplying
manufacturing, marketing, and/or wholesale distributing after-market wheels,
tires or accessories for vehicle models or brands currently or planned to be
supplied, manufactured and/or distributed by [Wheel Pros].
. . . .
During the period of Executive’s employment with the Partnership, Employer or
3 “Executive” in the Unit Grant Agreement refers to Lanzello. (Am. Compl, Ex. B, ECF No. 23-1
at 1.)
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any of their respective Subsidiaries and for five (5) years following any
Separation, Executive shall not, and shall not cause any of his or her Affiliates to,
directly or indirectly, solicit (except pursuant to a general solicitation which is not
directed specifically to any officer, manager or employee of the Partnership or
any of its Subsidiaries) or hire, retain or engage any officer, manager or
employee of the Partnership or any of its Subsidiaries (collectively, the “Company
Employees”), or encourage any such Company Employee to leave his or her
employment or hire any such Company Employee who has left such employment;
provided, however, that nothing in this Section 9(b) shall prevent Executive or
any of his or her Affiliates from soliciting or hiring any former Company
Employee whom has not been employed by the Partnership or any of its
subsidiaries for the twelve (12) month period preceding such solicitation or
hiring.
(Am. Compl, Ex. B, ECF No. 23-1 (“Unit Grant Agreement”) at ¶ 9(a)–(b) (emphasis added).)
The Unit Grant Agreement identifies the specific consideration provided to Lanzello in
exchange for his entry into these restrictive covenants as follows:
Executive acknowledges that the provisions of this Section 9 [containing the restrictive
covenants] are in consideration of: (i) Executive’s employment with the Partnership,
Employer and/or their respective Subsidiaries and (ii) the issuance of the Executive
Securities by the Partnership on the Issuance Date.
(Id. at 10 (emphasis added).) Additionally, the agreement frames the restrictive covenants as
“reasonable” as follows:
In addition, Executive agrees and acknowledges that the restrictions contained in Section
8 and this Section 9 are reasonable, do not preclude Executive from earning a livelihood,
nor do they unreasonably impose limitations on Executive’s ability to earn a living.
Executive further agrees and acknowledges that the potential harm to the Partnership and
its Subsidiaries of the non-enforcement of Section 8 and this Section 9 outweighs any
potential harm to Executive of its enforcement by injunction or otherwise. Executive
acknowledges that he or she has carefully read this Agreement and consulted with legal
counsel of his or her choosing regarding its contents or has voluntarily and knowingly
foregone such consultation, has given careful consideration to the restraints imposed
upon Executive by this Agreement and is in full accord as to their necessity for the
reasonable and proper protection of confidential and proprietary information of the
Partnership and its Subsidiaries now existing or to be developed in the future. Executive
expressly acknowledges and agrees that each and every restraint imposed by this
Agreement is reasonable with respect to subject matter and time period.
(Id.)
Moreover, Section 3 of the Unit Grant Agreement provides that a violation of the
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restrictive covenants will lead to the automatic cancellation of the equity granted to Lanzello
under the terms of the agreement:
In the event of a Separation for any reason . . . or if Executive has at any time (including
following a Separation) breached (a “Restrictive Covenant Breach”) any of the
provisions of Section 8 or Section 9 or any other confidentiality, non-competition, non-
solicitation or no-hire obligations set forth in any other written agreement between
Executive, on the one hand, and the Partnership, Employer or any of their respective
Subsidiaries, on the other hand, all Unvested Profit Interest Units will be automatically
cancelled upon such a Separation or such Restrictive Covenant Breach without any
consideration paid therefor and without further action on the part of the Partnership or
any holder of any of the Unvested Profit Interest Units. In addition, in the event (a) of a
Separation resulting from a termination of Executive’s employment by the Partnership,
Employer or any of their respective Subsidiaries or (b) of a Restrictive Covenant Breach
at any time (including following a Separation), all Vested Profits Interest Units shall also
be automatically cancelled upon such Separation or such Restrictive Covenant Breach
without any consideration paid therefor and without further action on the part of the
Partnership or any holder of any of the Vested Profits Interest Units.
(Id. at 3–4 (emphasis supplied).)
1. 	Lanzello Received Adequate Consideration for Entry into the
Unit Grant Agreement’s Restrictive Covenants
As they argued in opposition to the underlying PI Motion, Defendants argue that Lanzello
received inadequate consideration in exchange for entering the Unit Grant Agreement because
the Profit Interest Units he received lost all value during Wheel Pros’ bankruptcy. (Motion at 8–
9.)4 According to Defendants, courts must “look at the adequacy of consideration to determine
whether a restrictive covenant is unreasonable, and, in doing so, analyze the consideration at the
time the restrictive covenant is sought to be enforced.” (Id. at 8 (emphasis in original).)
According to Defendants, because “the only consideration Wheel Pros gave to Lanzello were the
[profit interest units], which could not be freely transferred, and which were shortly thereafter
4 Defendants previously raised this argument in opposition to the PI Motion, arguing that
“the overbroad restrictive covenants are unenforceable due to failure of consideration.” (PI
Opposition at 22.)
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destroyed by Wheel Pros’ voluntary decision to restructure . . . there was no adequate
consideration measured at the time the restrictive covenant was sought to be enforced by Wheel
Pros.” (Id. (emphasis in original).)
Wheel Pros argues that Delaware law does not support Defendants’ position, relying on a
series of cases holding that courts only evaluate whether there was adequate consideration at the
time the parties entered into the agreement—not when the parties seek to enforce the
agreement’s terms. (Opposition at 10.) For example, in Schell Bros., LLC v. Pickard, No. 2022-
642, 2023 WL 2581711 (Del. Ch. Mar. 21, 2023), the court recognized that “[w]hen analyzing
the sufficiency of the consideration exchanged in a contract, Delaware courts limit our inquiry
into consideration to its existence and not whether it is fair or adequate.” Id. at *4. Similarly, the
court in Payscale Inc. v. Norman, No. 2025-118, 2025 WL 1622341 (Del. Ch. June 9, 2025),
analyzed consideration “when the parties executed the Incentive Equity Agreements . . . .” Id. at
*5. Wheel Pros also points to the express terms of the Unit Grant Agreement, which state that the
restrictive covenants are in exchange for Lanzello’s continued employment with Wheel Pros in
addition to a grant of equity interests, and Lanzello’s testimony that he signed the Unit Grant
Agreement as a condition of his promotion to Regional Vice President at the company.
(Opposition at 10–11 (citing Unit Grant Agreement, ¶ 9(e); Reply Aff. of Katharine J. Liao, Esq.
in Further Support of Mot. for Prelim. Injunction (ECF No. 36), Exhibit A, Lanzello Dep.,
400:20–401:7).)
As an initial matter, the record establishes that Lanzello received two forms of
consideration in exchange for his entry into the Unit Grant Agreement: equity shares in Wheel
Pros and his continued employment with the company. Paragraph 9 of the Unit Grant Agreement
explicitly states that its non-competition and non-solicitation provisions “are in consideration
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of . . . Executive’s employment with the Partnership, employer and/or their respective
Subsidiaries and . . . the issuance of the Executive Securities.” (Unit Grant Agreement ¶ 9(e)
(emphasis added).) Delaware law “permits continued employment to serve as consideration for
an at-will employee’s agreement to a restrictive covenant.” Newell Rubbermaid Inc. v. Storm,
No. CV 9398, 2014 WL 1266827, at *9 (Del. Ch. Mar. 27, 2014); see also All Pro Maids, Inc. v.
Layton, No. CIV.A. 058-N, 2004 WL 1878784, at *3 (Del. Ch. Aug. 9, 2004) (“In Delaware,
employment or continued employment may serve as consideration for an at-will employee’s
agreement to a restrictive covenant.”), aff'd, 880 A.2d 1047 (Del. 2005). Accordingly,
Defendants’ argument that “the only consideration Wheel Pros gave to Lanzello were the Units”
is squarely contradicted by the factual record, which establishes that Lanzello was also provided
consideration in the form of continued employment. (See Motion at 8; Unit Grant Agreement
¶ 9(e).) Defendants’ arguments to the contrary are unpersuasive.
Further, Defendants—once again repeating arguments made in opposition to the
preliminary injunction motion, which were rejected in the PI Order—fail to identify any
controlling authority for the notion that a court must assess the adequacy of consideration for a
party’s agreement to a contract containing forward-looking restrictive covenants by analyzing
whether the consideration provided when the contract was formed retains value at the time the
covenants are enforced. As in its brief opposing the motion for a preliminary injunction,
Defendants again rely solely on a misreading of Sunder Energy, LLC v. Jackson, 332 A.3d 472
(Del. 2024). (See Motion at 8; PI Opposition at 22.) In Sunder Energy, the Supreme Court of
Delaware assessed the lower court’s refusal to blue pencil restrictive covenants contained in a
new LLC operating agreement. The new operating agreement at issue superseded the default
provisions of the Delaware Limited Liability Company Act under which the LLC had previously
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operated, which did not contain any restrictive covenants. Sunder, 332 A.3d. at 478. The
consideration exchanged for the appellee to be bound by the covenants in the new agreement was
but one of many factors considered by the court in its blue-penciling analysis. Id. at 485–490. In
Sunder, the court found it notable that the employee who was challenging the enforceability of
the covenants in the new LLC operating agreement “received minimal-to-no separate
compensation in exchange for his agreement to be bound by the Covenants.” Id. at 489
(emphasis added). By analyzing what the employee was offered in exchange for his agreement,
the Sunder court focused on the provisions of the new operating agreement itself, at the time it
was entered. Contrary to Defendants’ assertions, the value of the consideration at the time the
restrictive covenant was to be enforced did not guide the court’s analysis. Sunder is
distinguishable from the situation here, where Wheel Pros seeks to enforce restrictive covenants
set forth in an agreement for which two different forms of consideration were provided to
Lanzello at the time he entered into the agreement.
Defendants thus fail to identify any legal authority to support their assertion that the Unit
Grant Agreement is unenforceable because the profit interest units granted to Lanzello through
the agreement had no value by the time Wheel Pros sought to enforce it. Indeed, courts assess the
adequacy of consideration provided for a party’s entry into a contract containing restrictive
covenants at the time the parties entered the contract—not at the time the non-breaching party
seeks to enforce the contract. See Payscale Inc., 2025 WL 1622341, at *5 (Del. Ch. June 9,
2025) (assessing the value of consideration “when the parties executed the Incentive Equity
Agreements” (emphasis added)); cf. Newell Rubbermaid Inc. v. Storm, No. 14-cv-9398, 2014
WL 1266827, at *9 (Del. Ch. Mar. 27, 2014) (“Delaware courts limit our inquiry into
consideration to its existence and not whether it is fair or adequate.”).
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Accordingly, Defendants’ argument that the Unit Grant Agreement cannot be enforced
because Lanzello did not receive adequate consideration for his entry into the restrictive
covenants set forth in the agreement is without merit.
2. 	The Geographic and Temporal Scope of the Restrictive
Covenants are Enforceable
In support of the Motion to Stay, Defendants repeat another argument made in opposition
to Wheel Pros’ motion for a preliminary injunction, that the restrictive covenants of the Unit
Grant Agreement are geographically and temporally overbroad. (See Motion at 11–18; PI
Opposition at 18–22.) According to Defendants, the restrictive covenants “expand beyond the
area in which Lanzello would gain any market advantage from his previous employment with
Wheel Pros,” including markets into which Wheel Pros has not yet entered. (Motion at 13.) They
also argue that the restrictive covenants are “temporally overbroad because they are longer than
necessary to protect Wheel Pros’ business interests,” and “Wheel Pros did not meet their burden
of proving that their economic interest in after-market wheels and accessories is in any way
related to a five-year timeline.” (Id. at 13, 15.) Finally, they argue that the restrictive covenants
are overbroad when the geographic and temporal scope are considered together. (Id. at 15–18.)
On this point, Defendants mostly repeat arguments made in their opposition to the
preliminary injunction motion, relying on largely the same case law, which the Court carefully
considered and rejected in the PI Order. For example, in opposition to the PI Motion, Defendants
argued:
Recently, in a series of cases starting with Kodiak . . . the Delaware Chancery Court and
the Delaware Supreme Court have affirmed that Delaware law will not enforce or reform
post-employment restrictions that are unclear or overbroad. See e.g. Hub Group, Inc. v.
Knoll, C.A. No. 2024-0417, 2024 WL 3453863, at *8–12 (Del. Ch. July 18, 2024).
(Opposition to PI at 19.) In the Motion to Stay, Defendants repeat this same argument almost
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verbatim as follows:
A series of cases starting with Kodiak Bldg. Parnters, LLC, the Delaware Chancery Court
and the Delaware Supreme Court have affirmed that Delaware law will not enforce or
reform post-employment restrictions that are so overbroad. See, e.g. 2022 WL 5240507,
at *11; Hub Grp., Inc., 2024 WL 3453863, at *8–12.
(Motion at 12.)
Defendants’ attempt to rebut the PI Order’s reliance on Hough Associates, Inc. v. Hill,
Civ.A. 2385-N, 2007 WL 148751 (Del. Ch. Jan. 17, 2007), and Avaya, Inc. v. Ali, Civ.A. 12-
10660, 2012 WL 2888474 (D. Mass. July 13, 2012), is also a rerun of arguments they previously
raised in their opposition to the preliminary injunction motion. For example, Defendants argued
as follows in opposition to the PI Motion:
Here, unlike in Hough Assocs., Wheel Pros does not limit the extensive duration of the
non-competition clauses to a reasonable geographic scope. The five-year non-compete is
plainly unenforceable because they have not met their burden of proving that their
economic interest in after-market wheels and accessories is in any way tied a five-year
timeline.
(Opposition to PI at 21). Defendants repeat this argument almost verbatim in the Motion to Stay:
Here, unlike in Hough Assocs., Wheel Pros did not limit the extensive duration of the
non-competition clauses to a reasonable geographic scope. The five-year non-compete is
plainly unenforceable because Wheel Pros did not meet their burden of proving that their
economic interest in after-market wheels and accessories is in any way tied to a five-year
timeline.
(Motion at 15.)
However, I already considered and rejected the aforementioned arguments in the PI
Order, which Defendants repeat nearly verbatim in their Motion to Stay briefing. I found that the
Unit Grant Agreement’s non-compete and non-solicitation restrictions are consistent with
provisions that Delaware courts and federal courts applying Delaware law have found to be
reasonable and distinguished the cases on which Defendants rely. (See PI Order at 51–52.)
Defendants arguments remain unpersuasive. Indeed, in Hough Associates, the Delaware
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Chancery Court found the five-year restrictive covenant reasonable because adequate
consideration was provided in exchange and the covenants “protected [the former employer]’s
legitimate economic interests.” 2007 WL 148751 at *14. Further, in Avaya, the court found that
“Delaware law also condones broad geographic restrictions, up to and including non-competes
with a global scope . . . when the relevant competitive market is equally broad or global.”
Avaya., 2012 WL 2888474, at *7 (D. Mass. July 13, 2012). Both Hough Associates and Avaya
illustrate that Delaware law scrutinizes non-compete agreements in light of the specific interests
they are tailored to protect. Here, the record clearly establishes that the five-year duration of the
restrictive covenants in the Unit Grant Agreement is tailored to protect Wheel Pros economic
interests. For example, Wheel Pros’ Global Vice President of Sales Eric Tiffin testified that the
five-year length of the restrictive covenants in Wheel Pros’ unit grant agreements reflects that
“[p]roduct and industry information usually is consistent over, you know, near a five-year term.
So, you know, with the amount of information [regional vice president] level and higher typical
where equity is issued they have access to a multitude of proprietary information.” (July 10, Hr’g
Tr. 78:2–11.) Similarly, the geographic scope of the restrictive covenants is tailored to serve the
“relevant competitive market” in which Wheel Pros currently operates, which is a market
spanning the United States. Avaya, Inc., 2012 WL 2888474, at *7; Tiffin, July 10, 2025 Hr’g Tr.
83:19–20 (testifying that Wheel Pros’ “largest customers” are “national”); Tiffin, July 10, 2025
Hr’g Tr. 111:9–18 (ASR Motorsport opened warehouses in Los Angeles, Atlanta, Dallas, and
New York—just like Wheel Pros). Accordingly, the restrictive covenants in the Unit Grant
Agreement are specifically tailored to serve Wheel Pros’ economic interests, and Defendants’
repetition of prior arguments does not carry their heavy burden to show a likelihood of success
on appeal. See Carroll v. Trump, 687 F. Supp. 3d 394, 400–01 (S.D.N.Y. 2023) (finding that the
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defendant “has not provided a single reason for the court to find that there is any likelihood that
he will succeed on appeal” when “many of [defendant’s] points in his current motion repeat
almost verbatim those offered in his prior briefing”). Holding otherwise would be “logically
inconsistent” with the PI Order. Rodriguez ex rel. Rodriguez, 175 F.3d at 235.
Defendants further contend that the PI Order erred by failing to consider how the
temporal and geographic scope of the non-compete operate together to unreasonably restrain
Lanzello, even if neither restriction is excessive in and of itself. (Motion at 15–18.) They rely on
Centurion Serv. Grp., LLC v. Wilensky, No. 23-cv-0422, 2023 WL 5624156 (Del. Ch. Aug. 31,
2023) (“Centurion”), where the court instructed:
When evaluating the reasonableness of a restrictive covenant, a court must consider how
the temporal and geographic restrictions operate together. The two dimensions
necessarily interact . . . [t]o examine each dimension individually overlooks the
interaction and enables employers to justify restrictions that are unreasonably onerous in
combination.
Id. at *3. On this basis, Defendants argue that the restrictive covenants in the Unit Grant
Agreement, which temporally restrict Lanzello from competing against Wheel Pros for five years
and geographically restrict him from competing with Wheel Pros anywhere it does business, or
actively planned to do business at the time the agreement was executed, are over broad. (Motion
at 17–18.)
Wheel Pros contends that Centurion is distinguishable because the restrictive covenants
in that action prohibited the defendant from working in areas related to Centurion’s “core
business,” in addition to “areas [where] Centurion might have thought about entering, and where
Centurion does or thought about doing any other activity” for a period of two years. (Opposition
at 12 (quoting Centurion Serv. Grp., LLC, 2023 WL 5624156 at * 4 (emphasis in Opposition)).)
The geographic scope of the restrictive covenant in Centurion included the entire United States
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as well as any area where “Centurion actively planned to solicit and engage in any business
activities in which it was engaged or actively plan[ned] to engage [in] at any time” during the
defendant’s employment. Centurion Serv. Grp., LLC, 2023 WL 5624156 at * 4. The court found
that the two-year restrictive covenants with such a broad geographic scope were unreasonable in
light of the exceptionally broad and poorly defined scope of business activities at issue. Id.
Wheel Pros argues that, by contrast, the Unit Grant Agreement “clearly defines Wheel Pros’
business as supplying, manufacturing, marketing, and/or wholesale distributing after-market
wheels, tires or accessories for vehicle models or brands and therefore, defines the scope of
restricted activities, unlike in Centurion.” (Opposition at 12 (quoting Unit Grant Agreement at
¶ 9(a)).)
Defendants’ reliance on Centurion is misplaced. The court in Centurion noted that
“whether the duration of a restrictive covenant is reasonable turns on the specific facts of the
case before the Court.” Centurion Serv. Grp., LLC, 2023 WL 5624156 at *4. The restrictive
covenants at issue in that case “fail[ed] to define precisely what Centurion’s business is,” and as
a result, “one could argue that [the former employee] could be in breach of the non-compete if he
were employed” in his relevant industry anywhere in the country or abroad. Id. The court also
found insufficient justification for the restrictive covenants because the plaintiff offered only
“vague and everyday concerns” rather than a “particularly strong economic interest” of the
plaintiff in enforcing the covenants. Id. at *5.
By contrast, here there is ample factual support for Wheel Pros’ “strong economic
interest” in enforcing restrictive covenants of the temporal and geographic scope as the
covenants in Lanzello’s Unit Grant Agreement. Id. Indeed, a holistic assessment shows that
temporal and geographic scope of the restrictive covenants are reasonable because they are
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specifically tailored to protect Wheel Pros’ interests as addressed above. The five-year duration
of the restrictive covenants corresponds to specific industry practices and knowledge that they
are meant to protect. (See Tiffin, July 10, Hr’g Tr. 78:2–11 (testifying that the restrictive
covenants are typically for five years because “[p]roduct and industry information usually is
consistent over, you know, near a five-year term”).) The geographic scope of the restrictive
covenants is also reasonable because it is tailored to protect Wheel Pros’ goodwill across the
United States—the market in which it operates. See Rsch. & Trading Corp. v. Pfuhl, 1992 WL
345465, at *12 (Del. Ch. Nov. 18, 1992) (“While most judicial opinions regarding the
reasonableness of the geographic extent of employee non-competition agreements speak in terms
of physical distances, the reality is that it is the employer’s goodwill in a particular market which
is entitled to protection.”). As one court has explained:
If that market or the customer base of the business “extends throughout the nation, or
indeed even internationally, and the employee would gain from the employment some
advantage in any part of that market,” then the employer and the business may enter into
an enforceable contract prohibiting the employee “from soliciting those customers on
behalf of a competitor regardless of their geographic location.”
Kan-Di-Ki, LLC, 2015 WL 4503210, at *20 (emphasis added) (quoting Rsch. & Trading Corp,
1992 WL 345465, at *12).
In the PI Order, I made the factual finding that Wheel Pros conducts business “in markets
that span the United States,” as shown by evidence in the record including, but not limited to
Tiffin’s testimony that Wheel Pros’ “largest customers” are “national.” (PI Order at 52 (finding
that “the record suggests that the goodwill of Wheel Pros . . . extends nationally” (citing July 10,
2025 Hr’g Tr. 82:19–20)).) Wheel Pros’ customers are retailers and distributors of after-market
wheels and accessories—such as Tire Agent, 	—which purchase Wheel Pros
products and sell them to consumers. (See PI Order at 15 (discussing Defendants’ solicitation of
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Wheel Pros’ customers); id. at 4 (“Wheel Pros’ clients include over 10,000 retailers and a
network of distribution centers across North America and Australia.” (citing Am. Compl. ¶ 4).)5
Wheel Pros has 30,000 active customers, which “range from national accounts all the way down
to brick and mortar retailers.” (Tiffin, July 10, 2025 Hr’g Tr. 64:15–18.) Tiffin supervises four
regional vice presidents in the United States, whose regions cover activity relating to Wheel Pros
warehouses in Los Angeles, Atlanta, Dallas, and New York. (Tiffin, July 10, Hr’g Tr. 65:1–6; id.
111:9–18.)6 ASR Motorsport opened warehouses in those same regions to compete with Wheel
Pros. (Tiffin, July 10, 2025 Hr’g Tr. 111:9–18.) Thus, according to the factual findings in the PI
Order, Wheel Pros conducts business across the entire United States and the market for its
business is properly understood to be national. Accordingly, the PI Order preliminarily enjoins
Lanzello from competing with Wheel Pros anywhere in the United States.
Additionally, Delaware courts have upheld non-compete provisions that last five years
and cover a wide geographic scope in the case of employees with knowledge and expertise
comparable to that of Lanzello. See Kan-Di-Ki, LLC v. Suer, 2015 WL 4503210, at *19 (Del. Ch.
July 22, 2015) (finding the “temporal and geographic[al] limits” of a five-year non-compete
agreement covering twenty-three states to be reasonable, “especially” considering “the
competitive nature of the industry and the depth of [employee]’s knowledge” (emphasis added));
O’Leary v. Telecom Res. Serv., LLC, 2011 WL 379300, at *5 (Del. Super. Jan. 14, 2011) (finding
reasonable a four-year non-compete that covered the entire United States). Lanzello was not an
5 As found in the PI Order, retailer Rayco was formerly a Wheel Pros customer, but Defendants’
conduct caused Wheel Pros’ to lose goodwill and a business relationship with Rayco. (PI Order
at 36–37.)
6 Although Tiffin testified that he oversees 40 distribution centers for Wheel Pros, he did not
specify where in the United States those centers are located, other than Los Angeles, Atlanta,
Dallas, and New York.
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ordinary employee with rudimentary knowledge about Wheel Pros’ operations. He was a
regional vice president overseeing sales and operations over a broad geographic area—Wheel
Pros’ Northeast region, which includes New York City, New Jersey, parts of Michigan and Ohio,
and the rest of the Northeast—and had specialized knowledge about Wheel Pros’ pricing,
customers, and sales strategy. (See ECF No. 29-11, Exhibit J at 35:14–36:9 (Lanzello testifying
that the Northeast region consisted of seven to nine warehouses “[m]ostly in the northeast, a little
bit into Ohio and to Michigan.”); Decl. of Wheel Pros’ Global Vice President of Sales Eric
Tiffin, ECF No. 35-3, at ¶¶ 2–3 (Tiffin attests that Wheel Pros operates “across five (5) different
countries” and that the Northeast Region includes New York and New Jersey)).) Thus, I also find
that the non-compete provisions in the Unit Grant Agreement are reasonable in light of the
“industry and the depth of [Lanzello’s’] knowledge.” Kan-Di-Ki, LLC, 2015 WL 4503210, at
*19.
Defendants’ portrayal of the restrictive covenants in the Unit Grant Agreement as a
“restraint on an after-market wheel regional sales manager’s ability to seek employment just
about anywhere in the world” is inaccurate. (Motion at 15.) Section 9(a) of the Unit Grant
Agreement restricts Lanzello from competing with Wheel Pros “within any state in the United
States or similar geographical area outside of the United States in which [Wheel Pros] has
conducted or has actively planned to conduct the Business as of the date hereof.” Pursuant to
these terms, Lanzello is geographically restricted from competing with Wheel Pros in: (1) any
state in the United States where Wheel Pros has conducted or actively planned to conduct
business as of July 6, 2021—the date on which Lanzello signed the Unit Grant Agreement, and
(2) any geographic regions outside of the United States that are similar to a state, in which Wheel
Pros had conducted business or had been actively planning to conduct business as of July 6,
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2021. As noted above, I made a factual finding in the PI Order that Wheel Pros marketed its
goods across the United States. (PI Order at 52.) I did not, however, make any factual findings
concerning specific locations outside of the United States where Wheel Pros had conducted
business or had been actively planning to conduct business as of July 6, 2021, because the parties
failed to address any such locations in their evidentiary submissions.7 Accordingly the United
States is the relevant market for enforcement of the non-compete restriction.
Defendants also argue that the PI Order erred in analogizing the restrictive covenants in
Lanzello’s Unit Grant Agreement to restrictive covenants in the context of a sale of a business.
(Motion at 10–11.) As a threshold matter, Defendants’ briefing on this point incorrectly suggests
that the PI Order relied solely on caselaw concerning the enforcement of restrictive covenants in
the context of the sale of a business and not employment agreements. (See id.) Defendants are
wrong. The PI Order set forth caselaw addressing the reasonableness of restrictive covenants that
were a part of employment agreements, including Hough Associates, Inc., 2007 WL 148751 at
*6, which enforced a five-year non-compete and Avaya, Inc., 2012 WL 2888474 at *1–3, 7,
which enforced a non-compete “with a global scope,” both of which concerned restrictive
covenants in employment agreements. (PI Order at 51.) I also found that Defendants relied on
7 Indeed, neither party submitted evidence of any specific locations outside of the United States
similar in geographic size to a state in the United States where Wheel Pros has conducted
business or had been actively planning to conduct business as of July 6, 2021. Rather, Tiffin
generally attested that Wheel Pros operates “across five (5) different countries” without
identifying those countries by name. (ECF No. 35-3, at ¶¶ 2– 3.) At the preliminary injunction
motion hearing, Tiffin further testified that his full responsibilities include Wheel Pros
distribution centers “which are 40 around the globe” as well as supervisory responsibilities over
four regional Vice Presidents in the United States “two regional managers internationally . . .”
(Tiffin, July 10, Hr’g Tr. 65:1-6.) However, Tiffin did not identify the geographic scope of the
locations where Wheel Pros does business outside the United States or where it had been actively
planning to do business outside of the United States as of July 6, 2021, and the Court made no
factual findings regarding such locations outside of the United States in the PI Order.
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cases that were distinguishable. (PI Order at 51–52 (distinguishing Kodiak Bldg. Partners, LLC
v. Adams, No. 2022-311, 2022 WL 5240507, at *1 (Del. Ch. Oct. 6, 2022), and Hub Group., Inc.
v. Knoll, No. 2024-471, 2024 WL 3453863, at *1 (Del. Ch. July 18, 2024)).)
Defendants’ critique thus boils down to a challenge to the inclusion of the following
reasoning in the PI Order:
Since I find that, on the record before me on the PI Motion, the restrictive covenants in
the Unit Grant Agreement are likely reasonable in geographic scope and temporal
duration, I do not address whether ‘blue penciling’ the provisions would be appropriate.
However, I note that the Unit Grant Agreement concerns the sale of equity in Wheel
Pros, which generally aligns with one of the contexts in which the Delaware Supreme
Court has held that blue penciling may be appropriate. See Sunder, 332 A.3d at 486
(holding that blue penciling is appropriate “in the context of the sale of a business.”)
(PI Order at 52.)
Defendants identify no error in such reasoning. As noted, in the PI Order, the conclusion
that the restrictive covenants are reasonable in scope is based on analysis of caselaw in which
employees agreed to such restrictions in employment agreements. In the PI Order, I noted, in
passing, that Lanzello’s acceptance of the restrictive covenants in an agreement that granted him
both continued employment and equity interest in Wheel Pros “generally aligns with” the sale of
a business. (PI Order at 52.) Nevertheless, I did not actually blue pencil the agreement or rely on
the caselaw concerning restrictive covenants in the context of the sale of a business in
determining that the restrictive covenants set forth in the Unit Grant Agreement are reasonable.
(See id. at 51–52.)
According to Defendants, the Unit Grant Agreement should only be understood to be “an
employment-related noncompete agreement” and the PI Order erred in suggesting something
otherwise. (Motion at 11.) In support, Defendants rely on Weil Holdings II, LLC v. Alexander,
2025 WL 689191 (Del. Ch. Mar. 4, 2025), where the court considered a non-compete restriction
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that “was not negotiated in the context of a sale of a business” and was generally not negotiated
“in any substantive way.” 2025 WL 689191 at *7 (Del. Ch. Mar. 4, 2025). The court declined to
enforce the non-compete because, even assuming that the “Defendant was a sophisticated
investor with an opportunity to negotiate the Noncompete, his position as a unitholder employee
placed him in a disparate bargaining position.” Id. Defendants argue that Lanzello is a
“unitholder employee” no different than the defendant in Weil, given that Lanzello purportedly
had no bargaining power and did not negotiate the Unit Grant Agreement. (Motion at 11.) On
that basis, Defendants argue the restrictive covenants should be subjected to a higher level of
scrutiny. (Id.)
Defendant’s arguments relying on Weil fail to show a likelihood of success on appeal for
two reasons. First, as addressed above, in the PI Order, I explicitly declined to address whether
blue penciling the non-compete covenant was appropriate and did not base my conclusion that
the restrictive covenants are reasonable on the sale-of-business caselaw that Defendants seek to
distinguish. Second, Weil is clearly distinguishable from this action because the restrictive
covenants at issue there were “potentially indefinite” in temporal scope, and the geographic
scope could change dramatically over time. Weil, 2025 WL 689191 at *5. The court therefore
concluded: “Taken together, the duration and geographic scope of the Noncompete could
indefinitely restrict Defendant from practicing podiatric medicine in a geographic region that is
constantly subject to change.” Id. at *6. Thus, the covenant at issue in Weil imposed both greater
and more variable restrictions than the five-year restrictive covenants prohibiting Lanzello from
competing with Wheel Pros in the United States, which I determined is “likely reasonable in
geographic scope and temporal duration” based on caselaw enforcing restrictive covenants in
employment agreements. (See PI Order at 51–52.) Further, the court in Weil “[took] into
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account” the fact that the defendant “did willingly agree to [the noncompete] as part of an
investment in which he held himself out as a sophisticated party, as opposed to simply accepting
it as a precondition of employment.” Weil, 2025 WL 689191 at *5 (emphasis added). Although
the court treated the defendant as a sophisticated party, rather than a regular employee, the
restrictive covenants were nevertheless unreasonable because of their limitless temporal scope
and excessive and changing geographic scope.
Defendants concede that the reason non-compete provisions are afforded greater latitude
when associated with the sale of a business is “because they are seen as protecting the goodwill
and value of the business being sold.” (Motion at 10.) Here, Tiffin testified that the rationale
behind the five-year length of the restrictive covenants in the Unit Grant Agreement is that
“[p]roduct and industry information usually is consistent over . . . a five-year term” and that the
life cycle of a wheel is “typically” five-years. (July 10, Hr’g Tr. 78:2–11.) Wheel Pros asked
company executives who had intimate knowledge of the company’s product, sales data, and
other confidential information to enter into these restrictive covenants. (Id. at 78:2–9.) Lanzello
was asked to do so because he was a vice president for Wheel Pros’ Northeast Region with
“relatively unrestricted” access to sales data:
[Regional Vice Presidents] are typically involved in every part of the organization. They
are involved in decisions with some of our largest customers which sometimes are
national. So they need to have access across all of our network to understand what's
going on. So, yeah. It’s critical to the business. Also our [Regional Vice President] team
is intimately involved with working with product development design . . . so they get full
access.
(Tiffin, Id. at 82:18–83:2). Wheel Pros asked Lanzello, as an executive leader, to sign the Unit
Grant Agreements precisely because he was given access to extensive sensitive and confidential
data that he could misappropriate to compete against Wheel Pros and destroy the company’s
goodwill with its customers. As shown by the factual findings in the PI Order, Lanzello has done
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just that with respect to Wheel Pros’ former customer Rayco and will likely continue to engage
in similar misconduct absent the tailored preliminary injunction. Thus, the Court committed no
error in the PI Order when it evaluated the reasonableness of the restrictive covenants based on
caselaw in the employment agreement context, explicitly declined to decide whether blue
penciling the Unit Grant Agreement is appropriate, and simply observed that “the Unit Grant
Agreement concerns the sale of equity in Wheel Pros, which generally aligns with one of the
contexts in which the Delaware Supreme Court has held that blue penciling may be appropriate.
(PI Order at 52 (emphasis added) (citing Sunder, 332 A.3d at 486).)
Accordingly, Defendants do not show a likelihood of success on their arguments that the
restrictive covenants in the Unit Grant Agreement are unenforceable due to their temporal and
geographic scope.
3. 	The Restrictive Covenants in the Unit Grant Agreement Were
Not Cancelled in Bankruptcy
a. 	The Parties’ Arguments
The parties have addressed the impact of Wheel Pros’ Reorganization Plan on the status
of the Unit Grant Agreement in multiple rounds of briefing. It was first addressed in Defendants’
brief supporting the Motion to Stay and Wheel Pros’ opposition. (See Motion at 6–7; Opposition
at 6–9.) The parties further addressed this question in supplemental briefing in response to
questions from the Court. (See Defendants’ Supplement; Wheel Pros’ Supplement.) Through the
course of this briefing, the parties’ positions on the Reorganization Plan’s impact on the Unit
Grant Agreement have shifted to a degree.
Defendants first argue that under the plain text of Wheel Pros’ Reorganization Plan, the
Unit Grant Agreement was cancelled in its entirety. (Motion at 6.) They rely on Article IV,
Section G, which addresses the “Cancellation of Existing Securities, Agreements, and Interests.”
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(Id. (citing Reorganization Plan at 32).) Section G of Article IV provides that, upon the effective
date of Wheel Pros’ reorganization:
[A]ll notes, instruments, certificates, credit agreements, note purchase agreements,
indentures, and other documents evidencing Claims . . . or Existing Equity Interests shall
be cancelled, and any rights of any Holder in respect thereof shall be deemed cancelled
and of no force or effect, and all present and future obligations and liabilities, actions,
suits, accounts or demands, covenants, and indemnities (both actual and contingent), of
the Debtors and any non-Debtor Affiliates thereunder, or in any way related thereto, shall
be deemed satisfied in full, released, cancelled, discharged, and of no force or effect . . . .
(Reorganization Plan at 32 (emphasis added).) The Reorganization Plan defines “Existing Equity
Interests” as “any Interests in Wheel Pros Holdings, L.P. existing immediately prior to the
occurrence of the Effective Date” of the Reorganization Plan. (Reorganization Plan at 8.) In their
brief, Defendants focus on the Reorganization Plan’s definition of “Interest” as:
. . . any Equity Security, equity, ownership, profit interest, unit or share in any Debtor and
any other rights, options, warrants, rights, restricted stock awards, performance share
awards, performance share units, stock appreciation rights, phantom stock rights,
redemption rights, repurchase rights, stock-settled restricted stock units, cash-settled
restricted stock units, other securities, agreements to acquire the common stock, preferred
stock, limited liability company interests, or other equity, ownership, or profits interests
of any Debtor or any other agreements, arrangements or commitments of any character
relating to, or whose value is related to, any such interest or other ownership interest in
any Debtor . . . .
(Motion at 7 (citing Reorganization Plan at 11 (emphasis in Motion)).) Defendants argue that the
Unit Grant Agreement falls within the definition of “Interest” because it is both an “agreement[]
to acquire . . . profit interests” and falls within the category of “any other agreements,
arrangements or commitments of any character relating to, or whose value is related to, any such
interest or ownership interest by the Debtor . . . .” (Motion at 7 (citing Reorganization Plan at
11).) 8
8 Defendants misrepresent the record when they assert that “the District Court went so far as
shutting down testimony” by “improperly sustaining an ‘asked and answered’ objection” when
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In opposition, Wheel Pros points out that Defendants’ omitted part of the definition of
“Interest” set forth in the Reorganization Plan. (Opposition at 7.) The full definition reads as
follows:
. . . any Equity Security, equity, ownership, profit interest, unit or share in any Debtor and
any other rights, options, warrants, rights, restricted stock awards, performance share
awards, performance share units, stock appreciation rights, phantom stock rights,
redemption rights, repurchase rights, stock-settled restricted stock units, cash-settled
restricted stock units, other securities, agreements to acquire the common stock, preferred
stock, limited liability company interests, or other equity, ownership, or profits interests
of any Debtor or any other agreements, arrangements or commitments of any character
relating to, or whose value is related to, any such interest or other ownership interest in
any Debtor (whether or not arising under or in connection with any employment
agreement, separation agreement, or employee incentive plan or program of a
Debtor as of the Petition Date and whether or not certificated, transferable,
preferred, common, voting, or denominated “stock” or similar security).
(Reorganization Plan at 11 (emphasis in Opposition to highlight the part of the definition of
“Interest” that Defendants did not include).) Relying on the full definition, Wheel Pros argues
that “the [Reorganization] Plan contemplates the cancellation of equity interests and holders’
rights in those interests, but not the cancellation of underlying executory contracts like
employment agreements, separation agreements, and the [Unit Grant Agreement].” (Opposition
at 7.) In other words, Wheel Pros contends that the Unit Grant Agreement itself was not
cancelled; rather, only the specific provisions pertaining to the equity interests were cancelled,
Tiffin “was being questioned regarding whether the Unit Grant Agreement itself (not just the unit
shares) was cancelled in Bankruptcy.” (Motion at 7 (citing July 10 Hr’g Tr. at 170:17–171:3.)
Defendants’ counsel posed the following four questions in a row to Tiffin: “And you’re aware
that as part of that plan of reorganization, all existing equity interest in Wheel Pros were deemed
cancelled with no force and effect?” (July 10 Hr’g Tr. at 170:13–15); “So the Unit Grant to
Lanzello was canceled and with no force and effect following the bankruptcy?” (id. at 170:17–
18); “Well, the equity grant to Lanzello was certainly canceled and with no force and effect?”
(id. at 170:20–21); “So not only was the equity rendered valueless, it was fully canceled and of
no force and effect? That was the language.” (id. at 170:24–171:1.) It was after this final, near-
verbatim question of whether the equity grant to Lanzello was canceled with no force and effect
that the Court sustained Plaintiff’s counsel’s objection to that fourth question as asked and
answered. (See id. at 171:2–3.)
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leaving the rest of the Unit Grant Agreement, including the restrictive covenants, in effect.
According to Wheel Pros, other provisions of the Reorganization Plan reinforce its
reading, including Article V, Section G, which pertains to the treatment of executory contracts
and unexpired leases. This section provides that the “Debtors or the Reorganized Debtors, as
applicable, shall assume all Employment Agreements” and “all Compensation and Benefit
Programs,” excluding “any provisions . . . that provide for rights to acquire Interests, Existing
Equity Interests, or New Equity Interests, which . . . shall be deemed terminated on the Effective
Date.” (Opposition at 8 (quoting the Reorganization Plan at 40 (emphasis in Opposition)).) On
this basis, Wheel Pros argued that “the Reorganization Plan distinguishes between provisions
granting rights in equity interests, which were cancelled, and the employment and other
agreements and programs containing those provisions, whose other terms remain enforceable.”
(Id. (emphasis in Opposition).) At this point, Wheel Pros argued that the Unit Grant Agreement
was an executory contract under which both parties had unperformed material obligations that
would “ride through” and were enforceable after the bankruptcy petition was filed unless
explicitly rejected. (Id. at 7 (quoting In re Weinstein Co. Holdings LLC, 997 F.3d 497, 504 (3d
Cir. 2021)).) According to Wheel Pros, because the Unit Grant Agreement was not explicitly
rejected, and executory contracts were “deemed assumed” by the Reorganization Plan, the Unit
Grant Agreement was still in effect. (Id. at 8.) Finally, Wheel Pros argued that “the outcome of
Defendants’ [Unit Grant Agreement]-cancellation argument would . . . deeply offend notions of
equity and fairness.” (Id.) Because Lanzello “indisputably breached the [Unit Grant Agreement]
at least seven (7) months before Wheel Pros filed its bankruptcy petition,” to excuse his
“breaching conduct and future compliance” with the Unit Grant Agreement’s covenants because
of the bankruptcy proceedings would “be patently unfair.” (Id. at 8–9.)
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On October 20, 2025, I ordered the parties to submit supplemental briefing to address:
(1) whether the Unit Grant Agreement is an “executory contract” in light of Wheel
Pros, LLC’s Amended Joint Prepackaged Plan of Reorganization
(“Reorganization Plan”) and (ECF No. 48-6);
(2) whether the Unit Grant Agreement should be understood as an “incentive and
retentions plan[]” or any other type of Compensation and Benefits Program as
defined in the Reorganization Plan (ECF No. 48-6);
(3) whether the Unit Grant Agreement, in its entirety, was cancelled by any provision
of the Reorganization Plan, including but not limited to Section G, Cancellation of
Existing Securities, Agreements, and Interests of Article V of the Reorganization
Plan; and
(4) whether, even if the Unit Grant Agreement's grant of equity interests to Lanzello
was cancelled by the Reorganization Plan, the Agreement’s non-compete
provision should nevertheless be enforced in the interests of equity.
(Elec. Order, Oct. 20, 2025.)
In supplemental briefing, Defendants continue to rely on Article IV, Section G of the
Reorganization Plan and its definitions of “Existing Equities” and “Interests,” and argue that the
Profit Interest Units granted to Lanzello in the Unit Grant Agreement were cancelled pursuant to
the terms of the Reorganization Plan. (Defendants’ Supplement at 3–4.) Defendants also rely on
Article V, Section G.1 of the Reorganization Plan to argue that the Unit Grant Agreement is an
employee equity or equity-based incentive plan that was expressly cancelled by the
Reorganization Plan and deemed to be a non-executory contract. (Id. at 5–7). Article V, Section
G.1 of the Reorganization Plan provides that:
Subject to the provisions of this Plan, all Compensation and Benefits Programs shall be
treated as Executory Contracts under this Plan and deemed assumed on the Effective
Date pursuant to the provisions of sections 365 and 1123 of the Bankruptcy Code, except
for: (a) all employee equity or equity-based incentive plans, and any provisions set
forth in the Compensation and Benefits Programs that provide for rights to acquire
Interests, Existing Equity Interests, or New Equity Interests, which shall not constitute
or be deemed to constitute Executory Contracts and shall be deemed terminated on the
Effective Date.
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(Id. at 5 (quoting Reorganization Plan at 40 (emphasis in Defendants’ Supplement)).) According
to Defendants, “[t]here can be no dispute that the [Unit Grant Agreement] is an ‘employee equity
or equity-based’ incentive plan,” because the first page of the Unit Grant Agreement states that
“the Partnership and Executive desire to enter into an agreement pursuant to which, as part of
the incentive arrangements between the Partnership, Employer and Executive, the Partnership
will grant to Executive 2,850 Class B Common Units of the Partnership.” (Id. (quoting Unit
Grant Agreement at 1 (emphasis in Defendants’ Supplement)).) In the alternative, Defendants
argue that even if the Unit Grant Agreement is considered an executory contract, it could not be
“assumed in part and rejected in part,” contrary to Wheel Pros’ argument that the Reorganization
Plan canceled out only the equity-granting provisions of the Unit Grant Agreement while leaving
the restrictive covenants intact. (Id. at 7–8.)
Finally, in its supplemental brief, Defendants argue that the Delaware Chancery Court’s
decision in North American Fire Ultimate Holdings, LP v. Doorly, 2025 WL 736624 (Del. Ch.
Mar. 7, 2025), rebuts Wheel Pros’ argument that it would be unfair to not enforce the Unit Grant
Agreement’s restrictive covenants merely because the grant of equity to Lanzello was cancelled
by the Reorganization Plan. (Defendants’ Supplement at 9.) In Doorly, the plaintiff employer
issued 300,000 Class B units to the defendant employee pursuant to an agreement that contained
restrictive covenants. 2025 WL 736624, at *1 (Del. Ch. Mar. 7, 2025). The agreement identified
the units as “adequate and sufficient consideration” for the restrictive covenants and did not
mention any additional consideration, such as a promotion, increased compensation, or expanded
responsibilities. Id. Shortly after entering the agreement, the defendant was terminated for cause,
which resulted in an automatic forfeiture of the units. Id. Later, when the employer brought a
lawsuit seeking to enforce the restrictive covenants, the court held that they were unenforceable
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for lack of consideration since the units—which were the only consideration exchanged for the
restrictive covenants—had been forfeited. Id. at 3. Analogizing to Doorly, Defendants argue that
if Lanzello’s Profit Interest Units were cancelled in the bankruptcy, as Wheel Pros argues, then
the entire Unit Grant Agreement, including the restrictive covenants, fail for lack of
consideration. (Defendants’ Supplement at 8–10; see also id. at 10 (citing Payscale Inc. v.
Norman, 2025 WL 1622341 (Del. Ch. June 9, 2025)).)
In its supplemental brief filed in response to the October 20, 2025 Order, Wheel Pros
makes three main arguments. First, it shifts from its previous argument that the Unit Grant
Agreement was an executory contract to argue that the agreement was not an executory contract
on the effective date of the Reorganization Plan because Lanzello’s employment was terminated
for cause prior to that time. (Wheel Pros’ Supplement at 2–3.) Arguing that contracts where
“performance remains due on only one side” are to be considered non-executory, Wheel Pros
contends that Lanzello’s termination rendered the Unit Grant Agreement a non-executory
contract because there were no further material obligations for Wheel Pros to perform. (Id. at 3–
4.)
Second, in the alternative, Wheel Pros argues that even if the Unit Grant Agreement is an
executory contract, its restrictive covenants remain intact because “rejection of an executory
contract ‘constitutes a breach, not a recission or termination.’” (Id. at 6 (quoting Mission Prod.
Holdings, Inc. v. Tempnology, LLC, 587 U.S. 370, 372, 381 (2019)).) Wheel Pros contends that a
debtor’s rejection of an executory contract “relieves the debtor’s estate of the obligation to
perform, while leaving intact those provisions that survive a breach under non-bankruptcy law.”
(Id. at 6) On this basis, Wheel Pros argues that “the cancellation provision in [the Reorganization
Plan] applied to equity interests and arrangements—not to ongoing personal covenants and non-
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competition and confidentiality obligations.” (Id. at 7 (emphasis in original).) It also points to the
severability provisions of the agreement for support for its position that the restrictive covenants
remain intact, even if the equity granting provisions are no longer valid. (Id. at 7–9.)
Third, Wheel Pros argues that “equitable considerations independently compel
enforcement of Lanzello’s surviving restrictive covenants” because the factual record
demonstrates that Wheel Pros intended for the covenants to remain intact. (Wheel Pros’
Supplement at 9.) Wheel Pros relies on testimony by Tiffin and Executive Vice President John
Vang stating that they interpreted the Reorganization Plan to cancel the equity interests they
gained through unit grant agreements even though they remained bound by the restrictive
covenants in those agreements. (Id. at 9–10.) According to Wheel Pros, the interpretation that the
Reorganization Plan cancelled Lanzello’s restrictive covenants would contradict Tiffin and
Vang’s understanding of their own unit grant agreements and mean that Wheel Pros “intended to
cancel virtually all restrictive covenants with current and former employees in one fell swoop,”
which would not align with the company’s interests following reorganization through
bankruptcy. (Id. at 10.) Further, Wheel Pros argues that “[a]ny contrary reading of the plan
would result in Lanzello having released himself from his restrictive covenants by virtue of his
breach of those covenants – a result equity cannot countenance.” (Id.)
On October 28, 2025, I permitted the parties to file replies to each side’s supplemental
briefing (Elec. Order, Oct. 28, 2025). On reply, Defendants argue that regardless of whether the
Unit Grant Agreement is considered executory or non-executory, it is still cancelled in its
entirety by the plain language of the Reorganization Plan. (Defs.’ Add. Supp. Mem. of Law on
Force & Effect of Unit Grant Ag. (“Defendants’ Supp. Reply”), ECF No. 69 at 1–3.) Once again
relying on Doorly, 2025 WL 736624 (Del. Ch. Mar. 7, 2025), Defendants argue that the Unit
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Grant Agreement was rendered unenforceable for lack of consideration after Wheel Pros’
bankruptcy cancelled Lanzello’s equity interests. (Id. at 3–4.) Further, Defendants argue that the
equity-granting provisions of the Unit Grant Agreement cannot be severed and preserved from
the agreement itself, irrespective of the Unit Grant Agreement’s severability provision. (Id. at 4 –
6.) Last, Defendants argue that equity considerations do not support enforcement of the Unit
Grant Agreement because the Reorganization Plan “unambiguously indicates Wheel Pros’
intention to destroy the existing equity structure.” (Id. at 6.)
On reply, Wheel Pros argues that although the Reorganization Plan “cancelled Wheel
Pros’ prepetition equity interests to satisfy § 1129(b) [of the Bankruptcy Code], it neither did,
nor could it, eliminate Lanzello’s distinct contractual obligations to the company.” (Wheel Pros’
Supp. Reply Mem. of Law in Opp. to Stay Pend. Appeal (“WP Supp. Reply”), ECF No. 70 at 3.)
Wheel Pros also argues that the Unit Grant Agreement is not an “incentive plan” because the
company’s separate Limited Partnership Agreement differentiates between award agreements
and equity plans, and award agreements—not incentive plans—are specifically called “Unit
Grant Agreements.” (Id.) Further, Wheel Pros points out that Article IV, Sections F and R of the
Reorganization Plan “expressly retained all rights, claims, and causes of action belonging to the
Reorganized debtors,” even though it cancelled all ownership and equity interests. (Id. at 4.)
According to Wheel Pros, this further supports the notion that “[t]he [Reorganization] Plan
therefore distinguishes between cancelling ownership interests and preserving enforceable
rights.” (Id.) Finally, Wheel Pros argues that equitable principles compel the enforcement of the
restrictive covenants and Lanzello’s “protests of unfairness should be summarily disregarded”
because of the substantial compensation he received from the Unit Grant Agreement. (Id. at 6.)
b. 	Analysis
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As a threshold matter, Lanzello violated the restrictive covenants of the Unit Grant
Agreement long before Wheel Pros entered bankruptcy proceedings in September 2024.9 As I
found in the PI Order, Lanzello violated the restrictive covenants in February 2024, while he was
employed as Wheel Pros’ Vice-President for the Northeast Region, when he began engaging in
activities to found ASR Motorsport with Arthur Hale, the former CEO of a company that Wheel
Pros purchased and who was also subject to a separate non-compete agreement with Wheel Pros,
which was scheduled to expire on May 15, 2024. (Id. at 9–10; July 11, 2024 Hr’g Tr. 299:9.) The
PI Order sets forth detailed factual findings concerning Lanzello’s numerous, egregious
violations of the Unit Grant Agreement’s confidentiality and non-compete terms while still
employed at the company. (See generally PI Order at 8–16.) They include the following:
• 	in February 2024, Lanzello shared highly sensitive Wheel Pros’ sales data with
Arthur Hale (id. at 9);
• 	in February 2024 Lanzello exchanged messages with Hale regarding wheel
designs and Hale’s plans to re-enter the aftermarket wheels industry (id);
• 	in June 2024 Lanzello met with Hale, Leahy, and Junjie Chen, a former Wheel
Pros employee, to discuss wheel designs and business plans for starting ASR
Motorsport (id. at 10–11);
• 	in July 2024, Lanzello worked on business plans and wheel designs for ASR
Motorsport during working hours at Wheel Pros (id. at 11);
• 	in August 2024, Lanzello solicited Wheel Pros customers on behalf of ASR
Motorsport (id. at 13).
As a result of these numerous violations of his non-compete and confidentiality agreements with
Wheel Pros and his misappropriation of Wheel Pros’ trade secrets, Lanzello was terminated by
9 Wheel Pros filed its Chapter 11 bankruptcy petition on September 8, 2024. See In re Wheel
Pros, LLC, No. 24-11939 (ECF No. 1) (Bankr. D. Del. Sept. 8, 2024).
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Wheel Pros, for cause, on November 20, 2024. (Am. Compl. ¶ 68.)
Of critical significance here is the fact that Lanzello’s equity interest in Wheel Pros was
entirely extinguished as a result of his violations of the confidentiality and non-compete terms of
the Unit Grant Agreement starting in February 2024 and his termination for cause in November
2024. Paragraph 3 of the Unit Grant Agreement provides:
Cancellation of Profits Interest Units. In the event of a Separation for any reason . . . or
if the Executive has at any time (including following a Separation) breached (a
“Restrictive Covenant Breach”) any of the provisions of Section 8 or Section 9 or any
other confidentiality, non-competition, non-solicitation or no-hire obligations set forth in
any other written agreement. . . all Unvested Profit Interest Units will be automatically
cancelled upon such a Separation or such Restrictive Covenant Breach without any
consideration paid therefore and without further action . . .
(Unit Grant Agreement at 3–4 (emphasis added).) Paragraph 3 further provides:
In addition, in the event (a) of a Separation resulting from a termination of Executive’s
employment by the Partnership, Employer or any of their respective Subsidiaries for
cause or (b) of a Restrictive Covenant Breach at any time (including following a
Separation), all Vested Profits Interest Units shall also be automatically cancelled upon
such Separation or such Restrictive Covenant Breach without any consideration paid
therefore and without further action . . .
(Id. (emphasis added).) According to the plain terms of Paragraph 3, (1) any unvested profit
interest units conveyed through the Unit Grant Agreement are automatically cancelled in the
event of the employee’s breach of the non-compete and non-solicitation restrictive covenants as
well as termination of employment with Wheel Pros for any reason; and (2) any vested profit
interest units conveyed through the agreement are automatically cancelled in the event of the
employee’s termination for cause as well as any breach of the restrictive covenants at any time.
Thus, according to the plain terms of Paragraph 3 of the Unit Grant Agreement, by
November 20, 2024, if not before, all of Lanzello’s equity interests in Wheel Pros obtained
through the Unit Grant Agreement—whether vested or unvested—had been automatically
extinguished. The cancellation of these equity interests was automatic both because Lanzello had
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repeatedly breached the Unit Grant Agreement’s confidentiality, non-competition, and non-
solicitation clauses between February 2024 and his termination, and because Lanzello was
terminated for cause on November 20, 2024. Accordingly, as of November 20, 2024, Lanzello
had no equity interests in Wheel Pros by virtue of the Unit Grant Agreement, and Wheel Pros
had no material obligations left to perform under the agreement.
The question remains whether the Unit Grant Agreement was an executory or non-
executory contract at the time the Reorganization Plan went into effect on December 2, 2024. In
re Wheel Pros, LLC, No. 24-11939 (ECF No. 359) (Bankr. D. Del. Dec. 2, 2024.) The Second
Circuit “characterize[s] an executory contract as one “on which performance remains due to
some extent on both sides.” In re Penn Traffic Co., 524 F.3d 373, 379 (2d Cir. 2008); see also In
re Exide Techs., 607 F.3d 957, 962 (3d Cir. 2010), as amended (June 24, 2010) (defining
executory contracts as those “under which the obligation of both the bankrupt and the other party
to the contract are so far underperformed that the failure of either to complete performance
would constitute a material breach excusing the performance of the other”); In re Spectrum Info.
Techs., Inc., 193 B.R. 400, 404 (Bankr. E.D.N.Y. 1996) (same). On the other hand, contracts are
non-executory when performance is due by only one party to the contract—either the bankrupt
party or the other party. See In re NanoDynamics, Inc., 735 F. App’x 762, 764 (2d Cir. 2018); In
re Avianca Holdings S.A., 618 B.R. 684, 696 (Bankr. S.D.N.Y. 2020) (holding that when
“performance remains due on only one side, the contract is non-executory, and hence, neither
assumable nor rejectable.”);
Courts evaluate whether a contract is executory or non-executory “as of the date the
bankruptcy petition was filed.” In re NanoDynamics, Inc., 735 F. App’x 762, 764 (2d Cir. 2018).
“However, even if a court finds an executory contract on the petition date, post-petition events
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may indicate that no executory contract remains for the bankruptcy plan to [either] assume or
reject at the time it takes effect.” In re Worldcom, Inc., No. BKR. 02-13533, 2010 WL 2465362,
at *4 (Bankr. S.D.N.Y. June 11, 2010); In re Majestic Cap., Ltd., 463 B.R. 289, 299 (Bankr.
S.D.N.Y. 2012) (“Executoriness normally is measured as of the petition date, yet post-petition
events may occur that render an executory contract non-executory (citing In re Penn Traffic Co.,
524 F.3d at 381)). Thus, a contract that could have been considered executory when a bankruptcy
petition was first filed may lose its executory-status by the time that a plan of reorganization goes
into effect.
To assess whether the Unit Grant Agreement was executory, I first must determine
whether either party had any outstanding obligations to perform on the date Wheel Pros filed its
bankruptcy petition. Under the Unit Grant Agreement, Wheel Pros offered Lanzello
“employment with [Wheel Pros]” and “the issuance of the Executive Securities by the
Partnership on the Issuance date” in exchange for Lanzello’s agreement to be bound by the
confidentiality, non-compete, non-solicitation provisions, among other terms. (Unit Grant
Agreement at 7–10.) Thus, Wheel Pros owed Lanzello continued employment and issuance of
the Executive Securities specified in the agreement. Lanzello, in return, was prohibited from
disclosing any of Wheel Pros’ confidential information and, during his employment and for five
years following his separation from the company, competing with Wheel Pros and soliciting
Wheel Pros’ employees to leave their employment to work for a competitor. (Id. at 7–10.)
When the bankruptcy petition was filed on September 8, 2024, Lanzello’s equity interests
in Wheel Pros had already been automatically extinguished under Paragraph 3 of the Unit Grant
Agreement due to his breach of the non-compete and non-solicitation agreements through efforts
to establish ASR Motorsport, misappropriate Wheel Pros’ confidential information, and solicit
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Wheel Pros’ customers, among other violations, between February 4, 2024, and September 8,
2024. (See generally PI Order at 8–16.) Nevertheless, Wheel Pros continued to employ Lanzello,
and Lanzello remained bound by the restrictive covenants set forth in the Unit Grant Agreement.
Thus, on September 8, 2024, the Unit Grant Agreement was an executory contract because both
Wheel Pros and Lanzello had obligations that, if not carried out, would constitute a breach of the
contract: Lanzello was still bound by the restrictive covenants, and these covenants were still
supported by Wheel Pros’ continued employment of him.
However, “post-petition events may indicate that no executory contract remains for the
bankruptcy plan to assume or reject at the time it takes effect.” In re Worldcom, Inc., 2010 WL
2465362, at *4. Wheel Pros’ termination of Lanzello’s employment for cause on November 20,
2024 constitutes a post-petition event of significance to the determination that the agreement
ceased to be an executory contract on that date. After Lanzello’s termination for cause, Wheel
Pros no longer had any obligations left to perform under the Unit Grant Agreement: Wheel Pros
had already provided him the promised equity interests in the company, and Lanzello’s
employment was appropriately terminated due to his violation of the restrictive covenants of the
agreement. Nevertheless, pursuant to Paragraph 9 of the Unit Grant Agreement, Lanzello had a
continuing obligation to abide by the restrictive covenants until November 20, 2029—five years
after the date of his separation from Wheel Pros.10 Where the only “remaining obligation on the
part of the non-debtor under an employment or a termination of employment contract is
compliance with restrictive covenants, such continuing obligation generally does not rise to the
requisite level of materiality necessary to be considered executory.” In re Spectrum Info. Techs.,
10 Paragraph 9 provides that the non-compete restriction applies “for five (5) years following any
Separation” from Wheel Pros. (Unit Grant Agreement at 9.)
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Inc., 190 B.R. 741, 750 (Bankr. E.D.N.Y. 1996). Accordingly, after November 20, 2024, the
Unit Grant Agreement was no longer an executory contract. Therefore, by the time Wheel Pros’
Reorganization Plan went into effect on December 2, 2024,11 the Unit Grant Agreement was
already a non-executory contract and it remains so today.
For all of these reasons, Defendants’ arguments that the restrictive covenants are no
longer in force under Article V, Section G.1 of the Reorganization Plan are without merit. Article
V specifically applies to the treatment of executory contracts and therefore does not apply to the
Unit Grant Agreement, which was a non-executory contract on the date the Reorganization Plan
went into effect. (See Reorganization Plan at 37.)
Nor do Defendants make a persuasive argument that the Unit Grant Agreement falls
within the Reorganization Plan’s definition of an “Interest” and is therefore cancelled as an
“Existing Equity Interest” under Article IV, Section G of the Reorganization Plan. As addressed
above, Section G provides that all “Existing Equity Interests, shall, be cancelled” and that any
rights of a holder of such existing equity interests “shall be deemed cancelled and of no force or
effect . . . .” (Reorganization Plan at 32 (emphasis added); see supra Discussion § I (a)(i)(3)(a).)
“Existing Equity Interests” are defined as “any Interests in Wheel Pros Holdings, L.P., existing
immediately prior to the occurrence of the Effective Date” of the Reorganization Plan.
(Reorganization Plan at 8.) An “Interest,” in turn, is defined as:
. . . any Equity Security, equity, ownership, profit interest, unit or share in any Debtor and
any other rights, options, warrants, rights, restricted stock awards, performance share
awards, performance share units, stock appreciation rights, phantom stock rights,
redemption rights, repurchase rights, stock-settled restricted stock units, cash-settled
restricted stock units, other securities, agreements to acquire the common stock, preferred
11 See In re Wheel Pros, LLC, No. 24-11939 (ECF No. 359, Notice of Effective Date // Notice of
(I) Entry of Order Approving the Debtors' Disclosure Statement for, and Confirming, the
Debtor's Amended Joint Prepackaged Plan of Reorganization Pursuant to Chapter 11 of the
Bankruptcy Code and (II) Occurrence of Effective Date) (Bankr. D. Del. Dec. 2, 2024).
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stock, limited liability company interests, or other equity, ownership, or profits interests
of any Debtor or any other agreements, arrangements or commitments of any character
relating to, or whose value is related to, any such interest or other ownership interest in
any Debtor (whether or not arising under or in connection with any employment
agreement, separation agreement, or employee incentive plan or program of a Debtor as
of the Petition Date and whether or not certificated, transferable, preferred, common,
voting, or denominated “stock” or similar security).
(Reorganization Plan at 11 (emphasis added).) Defendants focus on the fact that the definition of
“Interests” includes an “agreement[] to acquire . . . profit interests” and “any other agreements,
arrangements or commitments of any character relating to, or whose value is related to, any such
interest or ownership interest by the Debtor.” (Motion at 6–7 (emphasis supplied).) But
Defendants read out the word “existing” from Article IV, Section G, which provides only that all
“Existing Equity Interests, shall be cancelled.” (Reorganization Plan at 32 (emphasis added).)
And Defendants entirely ignore the definition of “Existing Equity Interests” as equity interests in
Wheel Pros “existing immediately prior to the occurrence of the Effective Date” of the
Reorganization Plan. (Id. at 8 (emphasis added).)
As explained above, Lanzello’s equity interests were automatically cancelled as early as
February 2024 because of his violations of the restrictive covenants and, at the latest, by
November 20, 2024, when Wheel Pros terminated him for cause due to his violations. Either
way, by the time the Reorganization Plan went into effect in December 2024, Lanzello had no
“existing” equity interests by virtue of the Unit Grant Agreement due to his own misconduct.
Therefore, Article IV, Section G’s treatment of “Existing Equity Interests” simply does not apply
to the Unit Grant Agreement.12 Moreover, even if it did, the restrictive covenants would still be
12 For similar reasons, the Court finds unpersuasive Defendants’ argument that Article V, Section
G (1) cancels the Unit Grant Agreement because it should be considered a “Compensation and
Benefits Program” that was recognized as an executory contract and expressly terminated by the
Reorganization Plan. (Defendants’ Supplement at 5–8.) Article V specifically pertains to the
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in effect because, as Wheel Pros points out, the definition of “Interest” in the Reorganization
Plan distinguishes between stand-alone grants of equity and grants of equity that are a part of, or
“in connection with any employment agreement, separation agreement, or employee incentive
plan . . . .” (Opposition at 7 citing (Reorganization Plan at 11).) This distinction in the definition
of “Interest” applies to the term “Existing Equity Interests” in Article IV, Section G.
Accordingly, the Reorganization Plan cancelled all existing securities and grants of equity,
including grants of equity set forth in other agreements, but did not cancel every single document
that confers a grant of equity. Adopting Defendants’ interpretation of the plain text of Article IV,
Section G would have the perverse consequence of cancelling, in its entirety, every single
agreement that sets forth a grant of Wheel Pros equity, without regard to whether the equity at
issue had already been automatically cancelled prior to entry of the Reorganization Plan and
regardless of whether the agreement at issue contains restrictive covenants protecting Wheel
Pros’ trade secrets and confidential information, which the company sought to preserve in the
reorganization process. Either way, the restrictive covenants set forth in Lanzello’s Unit Grant
Agreement are unaffected by the Reorganization Plan and remain in effect. As a result, I do not
reach the parties’ arguments as to whether equitable considerations weigh in favor of enforcing
the restrictive covenants even if they no longer remain in effect.13
“Treatment of Executory Contracts and Unexpired Leases.” (Reorganization Plan at 37.) As
established above (supra Discussion § I (a)(i)(3)(b) at 44–46), at the time the Reorganization
Plan went into effect, the Unit Grant Agreement was not an executory contract and therefore the
provisions of Article V do not reach it.
13 Defendants rely on North American Fire Ultimate Holdings, LP v. Doorly, 2025 WL 736624
(Del. Ch. Mar. 7, 2025), to rebut Wheel Pros’ argument that failing to enforce the Unit Grant
Agreement’s restrictive covenants would offend notions of fairness and equity in light of
Lanzello’s numerous violations of his non-compete and non-solicitation obligations.
(Defendants’ Supplement at 9.) I decline to reach this argument because I find that the
Reorganization Plan did not cancel the Unit Grant Agreement’s restrictive covenants.
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ii. 	Rule 65(d)(1)(C)
Defendants argue they are likely to succeed on appeal from the preliminary injunction
because the PI Order does not describe the enjoined conduct in sufficient detail as required by
Rule 65(d)(1)(C), Fed. R. Civ. P. Specifically, Defendants contend that Paragraphs 4 and 5 of the
PI Order, which refer to Wheel Pros’ “Confidential Information” and “Developments,” are vague
because the parties dispute the meaning of these terms and Defendants “do not have ‘explicit
notice of precisely what conduct is outlawed.’” (Motion at 20 (quoting Lau v. Meddaugh, 229
F.3d 121, 123 (2d Cir. 2000)).) Defendants further argue that the preliminary injunction runs
afoul of Rule 65(d) because it refers to the Individual Defendants’ Non-Disclosure Agreements
for the definitions of “Confidential Information” and “Developments,” and purportedly does not
“describe[e] in reasonable detail what acts are forbidden or required from Defendant in the
injunctive order itself.” (Id. at 21.)
Wheel Pros makes three arguments in opposition. First, it contends that the term
“Developments” used in the PI Order includes at least some ASR Motorsport products in light of
the evidentiary record, which shows that “Lanzello actively directed ASR’s design and product
decisions based on Wheel Pros’ sales information” and the Individual Defendants, too, were
“heavily involved in determining style and design elements, engineering specifications, and
incorporating work done for Wheel Pros in ASR’s wheel designs.” (Opposition at 14 (citing
Wheel Pros’ PI Reply Brief, ECF No. 35, at 14).) On this basis, Wheel Pros asserts that
“Defendants cannot credibly claim that no ASR products are Developments,” and any insistence
otherwise is Defendants’ attempt to feign confusion about the preliminary injunction rather than
a genuine concern about vagueness. (Id. at 14 (emphasis in Opposition).) Second, Wheel Pros
contends that preliminary injunctions “can track language from documents in order to add
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specificity to the injunction” without violating Rule 65. (Id. at 15 (quoting IDG USA, LLC v.
Schupp, 416 F. App’x 86, 88–89 (2d Cir. 2011).) Third, Wheel Pros argues that even if the PI
Order is insufficiently specific, the proper remedy is to clarify its terms—not to stay the
injunction outright. (Id. at 15–16.)
Under Rule 65(d), an order granting a preliminary injunction must “describe in
reasonable detail—and not by referring to the complaint or other document—the act or acts
restrained or required.” Fed. R. Civ. P. 65(d)(1)(C). The rule “is designed to prevent uncertainty
and confusion on the part of those to whom the injunction is directed.” Rosen v. Siegel, 106 F.3d
28, 32 (2d Cir. 1997). For an injunction to comply with Rule 65(d), it need only be “specific and
definite enough to apprise those within its scope of the conduct that is being proscribed.” New
York State Nat’l. Org. for Women v. Terry, 886 F.2d 1339, 1352 (2d Cir. 1989) (emphasis
supplied); see also GMA Accessories, Inc. v. Eminent, Inc., No. 07-cv-3219, 2008 WL 2355826,
at *3 (S.D.N.Y. May 29, 2008) (same). In other words, a preliminary injunction is sufficiently
clear if it apprises the enjoined party of the proscribed conduct, leaving “no uncertainty in the
minds of those to whom it is addressed . . . .” King v Allied Vision, Ltd., 65 F.3d 1051, 1058 (2d
Cir. 1995); see also Fed. Trade Comm’n, 2024 WL 1026010, at *3 (recognizing that under Rule
65(d), “an injunction must be specific and definite enough to apprise those within its scope of the
conduct that is being proscribed”).
Once a party has filed a notice of appeal of a preliminary injunction, the court may not
alter the posture of the case on appeal. See Ideal Toy, 302 F.2d at 625. However, a court’s power
to preserve the status quo includes the power to clarify the terms of an injunction. Broker Genius,
Inc., v. Seat Scouts LLC, No. 17-cv-8627, 2019 WL 5203474, at *3 (S.D.N.Y. Sept. 23, 2019).
1. 	Confidential Information
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The preliminary injunction relating to Wheel Pros’ Confidential Information is set forth
in Paragraphs 1 and 4 of the PI Order:
(1) Defendants are enjoined from using, disclosing, accessing, reviewing or transferring
any confidential, proprietary or trade secret information relating to Wheel Pros’
business, including Confidential Information as defined in any written agreement
between Wheel Pros and any Individual Defendant, including without limitation, the
Non-Disclosure Agreements executed by Lanzello, Noori, Leahy, Palacios,
Thompson, and Huallanca . . .
(4) Defendants shall destroy and dispossess themselves of any of Wheel Pros’ sensitive,
proprietary, and confidential information, or other Wheel Pros’ Confidential
Information (as defined in the Individual Defendants’ Non-Disclosure Agreements),
or any derivations thereof, which Defendants still possess or control, subject to
supervision and verification by a neutral third party.
(PI Order at 55.) The PI Order provides the definition of “Confidential Information” set forth in
Lanzello’s Non-Disclosure Agreement as part of the factual findings on page five, as follows:
[I]nformation that is not generally known in the industry in which Wheel Pros is engaged, in
the possession, ownership or control of Wheel Pros or its employees. Confidential
Information includes, but is not limited to, information related to wheel and cap designs
(whether patentable, patented or not), trade secrets, programs, business plans, inventions
(whether patentable, patented or not), processes, formulas, existing or contemplated products,
technical data, services, technology, concepts, computer programs, plans, studies, techniques,
designs, specifications, patterns, contracts, presentations, and business information, and
including information related to any research, development, manufacture, purchasing,
engineering, know-how, sales or marketing methods, competitive analyses, methods of doing
business, customer lists, or customer usages or requirements.
(Id. at 5.) The PI Order sets forth the factual finding that “Noori, Palacios, Leahy, Tompson and
Huallanca all signed the same form non-disclosure agreement as the Lanzello Non-Disclosure
Agreement,” and cited where those agreements are located in the record. (PI Order at 8 & n.3.)
The PI Order also contains numerous findings of fact relating to the specific Confidential
Information that the Individual Defendants disclosed, demonstrating a likelihood of success on
the merits of Wheel Pros’ claims that the Individual Defendants violated the Defend Trade
Secrets Act and their Non-Disclosure Agreements with Wheel Pros. Specifically, I found that
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“ASR Motorsport took and leveraged a large volume of Wheel Pros’ confidential information”
constituting trade secrets protected by the Defend Trade Secrets Act, which includes the
following:
proprietary drawings of unreleased wheel designs (Stip. Exs. 11, 13), aggregated data
regarding Wheel Pros’ best-selling wheels and their associated fitments (Stip. Ex. 8),
detailed information concerning sales volumes (Stip. Ex. 4), and customer lists with
customer-specific pricing schemes (Stip Exs. 29, 31.) Furthermore, Wheel Pros took
steps to keep this confidential information secure, including by: (1) requiring employees
with access to trade secrets to sign non-disclosure agreements, (2) requiring employees to
use a two-factor authentication protocol in order to access trade secrete or otherwise
confidential information, and (3) limiting access to trade secrets within the company.
(July 10, Hr’g T. 81:22–82:9.)
(PI Order at 41; see also id. at 29–31 (describing in detail Defendants’ disclosure of Wheel Pros’
confidential information in violation of the Individual Defendants’ Non-Disclosure Agreements
with the company).) As shown in the excerpt above, the PI Order includes citations to evidence
in the record containing or identifying the specific confidential information at issue. Moreover,
the PI Order also identifies specific information that falls into each identified category of
Confidential Information.
First, with respect to Wheel Pros’ unreleased wheel designs, the PI Order sets forth the
specific finding that emails from Junjie Chen, a former Wheel Pros employee, to Hale, Lanzello,
Jeff Claunch, and Jose Valenzuela (a third party contractor), on August 9 and 10, 2024, disclosed
confidential drawings corresponding to two specific Wheel Pros wheel designs and a photograph
of a Wheel Pros spreadsheet with purchasing and sales data regarding specific stock keeping
units (“SKUs”). (Id. at 29–30; Stip. Ex. 11, ECF No. 47-1 at 89–102; Stip Ex. 13, ECF No. 47-1
at 129–33.)14 One of those designs was “still in sample stage in May [2024].” (PI Order at 11
(citing Stip. Ex. 11 at 89–102).) It also includes the finding that in the August 10, 2024 email,
14 (See also July 10, 2025 Hr’g Tr. 244:7–11; 246:21–23.)
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Chen disclosed to those same recipients the confidential information that Wheel Pros “started to
use 	.” (PI Order at 12; see Stip. Ex. 13 at 132.) And the PI Order
sets forth the finding that on August 12, 2024, Chen emailed the same group additional wheel
drawings and confidential descriptions of the wheel specifications pertaining to the drawings (PI
Order at 12; Stip. Ex. 15, ECF No. 47-1 at 143.) I further found that, on August 16, 2024,
Lanzello forwarded to A.D. Hale, Arthur Hale’s son, an email thread providing him access to:
(1) descriptions of the specifications set forth in the confidential drawings attached to the
August 10, 2024 email (2) discussions about “brand new” Wheel Pros wheel styles,
including one not yet in production as of May 2024, (3) the fact that Wheel Pros had
“started to use 	]” as of the date of the
email thread, and (4) a link to download a zip file, apparently containing the attached
confidential and proprietary Wheel Pros wheel drawings.
(PI Order at 30 (citing Stip. Ex. 15, ECF No. 47-1 at 140); see also id. at 45 (citing Stip. Ex. 15,
ECF No. 47-1).) The PI Order also sets forth the finding that Eric Grieving, Wheel Pros’ Product
Director, characterized some of the drawings sent by Chen as “a schematic for how to build the
wheels.” (PI Order at 12 (citing July 10, 2025 Hr’g Tr. 201:5–6).)
Second, with respect to aggregated data regarding Wheel Pros’ best-selling wheels and
their associated fitments, I specifically found in the PI Order that, on July 16, 2024, Lanzello
texted Hale Wheel Pros’ spreadsheets showing the company’s 100 top-selling SKUs for 2023
and year-to-date top 100 selling SKUs for 2024, including the average selling price of those
SKUs and the corresponding gross profit margin. (PI Order at 10, 45 (citing (Stip. Ex. 8, ECF
No. 47-1 at 63–76; July 10, 2025 Hr’g Tr. 124:23–125:1 (“[Tiffin]: This appears to be our SKUs,
looks like our top selling SKUs in order of volume, it looks like, with . . . average selling price
and gross margin.”)).) As explained in the PI Order, “SKU numbers used by Wheel Pros to
identify its approximately 12,000 wheel products contain five data points: (1) the wheel’s style
or design; (2) the wheel’s size; (3) the wheel’s bolt pattern; (4) the wheel’s finish; and (5) the
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wheel’s offset. (PI Order at 10 (citing July 10, 2025 Hr’g Tr. 84:3–8; 91:4–8).) Collectively, this
information provides a given wheel’s ‘fitment’—that is, what types of vehicles a particular wheel
will fit.” (Id. (citing July 10, 2025 Hr’g Tr. at 178:16–23).)
Third, with respect to detailed information concerning Wheel Pros’ sales volumes, I
specifically found in the PI Order that on February 14, 2024, Lanzello emailed Art Hale a
summary of Wheel Pros February 2024 year-to-date sales data. (PI Order at 9, 45 (citing Pl.’s
Rebuttal Ex. E, ECF No. 47-4 at 14–16).) And I also found that, on April 30, 2024, Lanzello
texted two screenshots to Hale showing Wheel Pros’ month-to-date and total daily sales revenue
by region. (Id. at 9, 45 (citing Stip. Ex. 4, ECF No. 47-1 at 42–46); see also Tiffin, July 10, 2025
Hr’g Tr. 86:15–17.)
Fourth, as for customer lists with customer-specific prices, I found that “the customer-
related information [Defendants] took from Wheel Pros goes far beyond a list of the names of
customers to include sales volume and prices for ranges of products under private pricing
arrangements.” (PI Order at 43 (citing Stip. Exs. 29, 31, ECF No. 47-2; July 10, 2025 Hr’g Tr.
104:8–106:4 (emphasis supplied)).) The PI Order expressly references the Parties’ Stipulated
Exhibit 29, which includes a link to a spreadsheet containing Wheel Pros part numbers, which
the PI Order found to consist of confidential information. (Id. at 43.) Similarly, the PI Order
expressly references Stipulated Exhibit 31, which refers to the “inventory file” that Defendant
Noori was “working on” and ultimately sent to Tire Agent, a Wheel Pros’ customer, by FTP on
January 31, 2025. (Stip. Ex. 31, ECF No. 47-2; see also PI Order at 43.) The email thread shows
that Noori sent Tire Agent the Wheel Pros’ inventory file in an effort to poach the client for ASR
Motorsport by offering lower prices. (Stip. Ex. 31, ECF No. 47-2.)
Thus, contrary to Defendants’ contentions, the PI Order provides the definition of
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“Confidential Information” set forth in the Individual Defendants’ Non-Disclosure Agreements,
albeit in the factual findings set forth in the “Background” and “Discussion” sections of the
order. More importantly, the PI Order details specific categories of Confidential Information
disclosed by Defendants in violation of those agreements and identifies where such information
is either located or identified in the record. Paragraph 1 of the PI Order enjoins Defendants from
“using, disclosing, accessing, reviewing or transferring any confidential, proprietary or trade
secret information relating to Wheel Pros’ business, including Confidential Information . . . .” (PI
Order at 55, ¶ 1.) Paragraph 4 of the PI Order requires that Defendants “shall destroy and
dispossess themselves of” that Confidential Information “or any derivations thereof, which
Defendants still possess or control, subject to supervision and verification by a neutral third
party.” (Id., ¶ 4.) Thus, contrary to Defendants’ suggestion that the PI Order simply refers to
“Confidential Information” without description or elaboration, the PI Order defines the term and
provides numerous illustrative examples. Cf. Corning Inc. v. PicVue Elecs., Ltd, 365 F.3d 156,
157–58 (2d Cir. 2004) (finding preliminary injunction to violate Rule 65(d) where it referred
only to “trade secrets” and “copyrighted works” without any definition). Because of this detail,
the PI Order is “specific and definite enough to apprise those within its scope,” New York State
Nat’l. Org. for Women, 886 F.2d at 1352—namely Defendants, who are fully aware of the
proprietary drawings of unreleased wheel designs, aggregated data regarding Wheel Pros’ best-
selling wheels and their associated fitments, detailed information concerning sales volumes, and
customer lists with customer-specific pricing schemes, that they impermissibly disclosed, which
include but are not limited to the specific information identified in the PI Order.
Accordingly, the term “Confidential Information,” as used in Paragraphs 1 and 4 of the PI
Order, is defined as:
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• 	proprietary drawings of Wheel Pros’ wheel designs, including, but not limited to:
o 	two Wheel Pros’ wheel designs attached to August 9 and 10, 2024 emails
from Junjie Chen to Lanzello, Art Hale, Jose Valenzuela, and Jeff
Claunch;
o 	drawings and confidential descriptions of the specifications pertaining to
the wheel drawings attached to August 12, 2024 emails from Junjie Chen
to Lanzello, Art Hale, Jose Valenzuela, and Jeff Claunch; and
o 	the fact that “Wheel Pros started to use 	” on
or around August 10, 2024, as disclosed in an August 10, 2024 email
from Junjie Chen to Lanzello, Art Hale, Jose Valenzuela, and Jeff
Claunch; and
• 	aggregated data regarding Wheel Pros’ best-selling wheels and their associated
fitments, including but not limited to:
o 	Wheel Pros’ spreadsheets showing the company’s 100 top-selling SKUs
for 2023 and year-to-date top 100 selling SKUs for 2024, including the
average selling price of those SKUs and the corresponding profit margin,
which Lanzello disclosed to Art Hale by text message on July 16, 2024;
o 	information contained in the “INNER PURCHASE SKUS.jpg” attached
to an August 10, 2024 email from Junjie Chen to Lanzello, Art Hale, Jose
Valenzuela, and Jeff Claunch;
• 	detailed information concerning Wheel Pros’ sales volumes, including but not
limited to:
o 	Wheel Pros’ spreadsheets showing the company’s April 2024 month-to-
date sales revenue by region and April 30, 2024 daily total sales revenue
by region, screenshots of which were sent by Lanzello to Art Hale by text
on April 30, 2024; and
o 	Wheel Pros’ February 2024 year-to-date sales data, which was texted by
Lanzello to Art Hale on February 14, 2024;
• 	Wheel Pros’ customer lists with customer-specific prices for products, including
but not limited to:
o 	a Google Docs spreadsheet containing Wheel Pros’ part numbers sent by
Ray Noori to Tire Agent on December 16, 2024; and
o 	an inventory file sent by Ray Noori to Tire Agent on or around January
31, 2025.
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I provide this clarification of the definition of the term “Confidential Information” in exercise of
the Court’s power to preserve the status quo pending adjudication of Defendants’ appeal of the
PI Order in a manner that is “consistent with the spirit” of the original preliminary injunction and
that does not “alter the posture of the case on appeal.” Flatiron Health, Inc., 602 F. Supp. 3d at
486 (citing Ideal Toy Corp., 302 F.2d at 625). As detailed above, this clarification reflects the
clear intent and factual findings set forth in the PI Order.
2. 	Developments
The preliminary injunction relating to Wheel Pros’ Developments is set forth in
Paragraph 5 of the PI Order as follows:
Defendants are enjoined from marketing, selling, exploiting, assigning, or otherwise
exercising any rights of ownership or control with respect to all ‘Developments,’ as
defined in the respective Individual Defendants’ Non-Disclosure Agreements, including,
but not limited to, aftermarket wheels and automotive accessories, created or contributed
to, in whole or in part, by any Individual Defendant while employed by Wheel Pros that
relate to Wheel Pros’ business, or result from or are suggested by any work performed for
Wheel Pros.
(PI Order at 56.) In its factual findings, the PI Order provides the definition of “Developments”
set forth in Lanzello’s Non-Disclosure Agreement with Wheel Pros as follows:
Paragraph 1(b) defines “Developments” as “inventions (whether or not patentable),
product designs (whether or not patentable), new technology, Confidential Information,
copyrightable works, mask works, trademarks or other intellectual property created
during [the employee’s] employment.”
(PI Order at 6 n.2.) As noted above, the PI Order also includes the factual finding that “Noori,
Palacios, Leahy, Thompson, and Huallanca all signed the same form non-disclosure agreement
as the Lanzello Non-Disclosure Agreement” and cited where those agreements are located in the
record. (Id. at 8 & n.3.)
As discussed at length in Discussion § I (a)(ii)(1), the PI Order sets forth specific factual
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findings concerning the Individual Defendants’ disclosure of Wheel Pros’ Confidential
Information in order to launch ASR Motorsport and develop products that the new company
could use to capture Wheel Pros’ market share. For example, I found that Junjie Chen’s emails
dated August 9 and 10, 2024 to Hale, Lanzello, Valenzuela, and Claunch “makes clear that the
purpose of sharing Wheel Pros’ proprietary wheel designs was to assist the development of
wheels for a new endeavor involving others on the email thread.” (PI Order at 29.) I also found
that Lanzello’s August 16, 2024 reply to Chen’s August 9 and 10, 2024 emails, which provided
A.D. Hale with access to Wheel Pros’ proprietary wheel designs, discussions of new wheel
styles, and “a link to download a zip file, apparently containing the attached confidential and
proprietary Wheel Pros wheel drawings” was for the “purpose of launching ASR Motorsport.”
(Id. at 30.) Furthermore, I found that “Defendants sent confidential Wheel Pros information to
customers in an attempt to poach their business from Wheel Pros.” (See id. at 30–31).) The PI
Order thus described Wheel Pros’ trade secrets and further found that “Defendants have already
engaged in conduct that threatens to compromise the value of those trade secrets, which include
proprietary wheel designs, SKU inventory system data, and pricing information.” (PI Order at 31
(discussing factual findings in pages 29–31 of the PI Order).) Defendants’ unsupported assertion
that “the Individual Defendants did not participate in the development of any of ASR’s wheels or
accessories while they were employed by Wheel Pros,” is thus squarely contradicted by factual
findings in the PI Order. (Decl. of Martin S. Krezalek, Esq. (“Krezalek Decl.), ECF No. 63-1 at
¶ 6). Supported by these factual findings, I concluded that the preliminary injunction factors—
irreparable harm, Wheel Pros’ strong showing of a likelihood of success on the merits of its
Defend Trade Secrets Act and breach of contract claims, the balance of the equities, and the
public interest—considered together, support a preliminary injunction against Defendants’
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“marketing, selling, exploiting, assigning, or otherwise exercising any rights of ownership or
control with respect to” products developed by the Individual Defendants during their
employment with Wheel Pros. (Id. at 56.)
Accordingly, “consistent with the spirit” of the original preliminary injunction and the
factual findings set forth in the PI Order, Flatiron Health, Inc., 602 F. Supp. 3d at 486, this
Opinion and Order clarifies that the preliminary injunction set forth in Paragraph 5 of the PI
Order enjoins the following specific conduct, which simply incorporates the definition of
“Developments” set forth on page 6 n.2 of the PI Order into the preliminary injunction itself:
Defendants are enjoined from marketing, selling, exploiting, assigning, or otherwise
exercising any rights of ownership or control with respect to any “Developments,” which
are defined as inventions (whether or not patentable), product designs (whether or not
patentable), new technology, Confidential Information, copyrightable works, mask
works, trademarks or other intellectual property created during the Individual
Defendants’ employment with Wheel Pros, including but not limited to aftermarket
wheels and automotive accessories that any Individual Defendant created or contributed
to, in whole or in part, while still employed by Wheel Pros that relate to Wheel Pros’
business, or result from or are suggested by any work performed for Wheel Pros.
While Defendants contend that the preliminary injunction regarding “Developments”
lacks clarity because the parties dispute what material falls within the scope of this term, Rule
65(d)’s requirement that a preliminary injunction must be clear and unambiguous “does not
mean that every conceivable example of the prohibited conduct must be spelled out in the text of
the order” because “[i]njunctions necessarily rely on descriptive language.” GMA Accessories,
2008 WL 2355826, at *3. For this very reason, in the trademark context, “it is not necessary for
an injunction to anticipate and name every variation on a trademark that a creative infringer must
use in order to skirt a judgment.” Id. Similarly, here, notwithstanding Defendants’ arguments that
the parties dispute what ASR Motorsport work product falls within the definition of
Developments, the preliminary injunction is not required to specify all of the specific ASR
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Motorsport products—whether in development or fully launched—that constitute Developments.
Rather, Defendants are aware of the inventions, product designs, new technology, Confidential
Information, copyrightable works, mask works, trademarks or other intellectual property that the
Individual Defendants created or to which they contributed for ASR Motorsport while they were
still employed by Wheel Pros. Moreover, as the Second Circuit has recognized, a preliminary
injunction that “track[s] language from [extrinsic documents]” may provide adequate specificity
to apprise the enjoined party of the proscribed conduct. IDG USA, 416 Fed. App’x at 89.
Defendants have identified no terms in the definition of “Developments” set forth in their Non-
Disclosure Agreements that are vague or contested. Even had they done so, the Second Circuit
has made clear that the “[t]erms of an injunction are construed according to the general
interpretive principles of contract law.” Fed. Trade Comm., 2024 WL 1026010 at *3. The
preliminary injunction relating to Developments therefore provides adequate specificity “to
apprise those within its scope” of the proscribed conduct. New York State Nat’l. Org. for Women,
886 F.2d at 1352.15
* * *
As set forth above, Defendants fail to show that they are likely to succeed on the merits
of their appeal with respect to their position that the PI Order erred in enforcing the Unit Grant
Agreement’s restrictive covenants and in failing to adequately define the proscribed conduct as
15 In Paragraphs 2 and 3, the PI Order also incorporates by reference the definition of “Business”
and “Company Employees” from the Unit Grant Agreement. In the clarified preliminary
injunction below, the Court specifically defines those terms as they are defined in the Unit Grant
Agreement, thereby removing the parties’ need to refer to any external documents to understand
the scope of the preliminary injunction. This clarification too is “consistent with the spirit” of the
original preliminary injunction and the factual findings set forth in the PI Order. Flatiron Health,
Inc., 602 F. Supp. 3d at 486.
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required under Rule 65(d).
Defendants have not met their burden to show that the restrictive covenants are likely
unenforceable on any of the theories they advance. These restrictions were supported by two
forms of consideration at their inception, which is the relevant point of inquiry. (See PI Order at
52; supra Discussion § I (a)(i)(1).) The temporal and geographic restrictions imposed on
Lanzello, considered as a whole, are likely reasonable under Delaware law, as I found in the PI
Order. (PI Order at 50–52; supra Discussion § I (a)(i)(2).) Moreover, because Lanzello
repeatedly violated the restrictive covenants from February 4, 2024 through his termination for
cause on November 20, 2024, the equity interests in Wheel Pros conveyed to him through the
Unit Grant Agreement were automatically cancelled before the Wheel Pros’ Reorganization Plan
went into effect, rendering the Reorganization Plan’s treatment of Existing Equity Interests
inapplicable to Unit Grant Agreement and leaving the agreement a non-executory contract. (See
supra Discussion § I (a)(i)(3).)
Moreover, Defendants do not show that they are likely to succeed in demonstrating that
the PI Order fails to describe the conduct from which Defendants are enjoined with sufficient
specificity under Rule 65(d). The PI Order included the definitions of both “Confidential
Information” and “Developments” drawn from the Individual Defendants Non-Disclosure
Agreements, albeit in its factual findings and legal conclusions. More importantly, the PI Order
identifies in detail specific categories of Confidential Information that Defendants disclosed as
well as where such information is described or located in the record, providing adequate notice to
Defendants of the specific information they must destroy or otherwise dispossess themselves of
and that they are enjoined from using, disclosing, access, reviewing, and transferring. (PI Order
Paragraphs 1, 4.)
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Finally, the PI Order provided the definition of “Developments” set forth in the
Individual Defendants’ Non-Disclosure Agreements, albeit in its factual findings. Nevertheless,
the definition of “Developments” is clarified consistent with the spirit of the PI Order to ensure
that Defendants are fully aware of what they are enjoined from marketing, selling, exploiting,
assigning, or otherwise exercising any rights of ownership or control over. Accordingly,
Defendants fail to show a likelihood of success in their claim that Paragraphs 4 and 5 of the PI
Order, as clarified in this Opinion and Order, fail to provide explicit notice of precisely what
conduct is outlawed under Rule 65(d).16
b. 	Irreparable Harm
Next, the Court considers whether Defendants will be irreparably harmed absent a stay.
See Mahdawi, 136 F.4th at 449. Irreparable harm and likelihood of success on the merits “are the
most critical” factors that courts evaluate when assessing a motion for a stay pending appeal.
New York v. United States Dep’t of Homeland Sec., 974 F.3d 210, 214 (2d Cir. 2020); see also
Church & Dwight Co. v. SPD Swiss Precision Diagnostics, GmbH, No. 14-cv-585, 2015 WL
5051769, at *2 (S.D.N.Y. Aug. 26, 2015), aff’d, 836 F.3d 153 (2d Cir. 2016), and aff’d, 843 F.3d
48 (2d Cir. 2016)) (“Irreparable harm is ‘perhaps the single most important prerequisite’ before a
16 Under Rule 65(c), before issuing a preliminary injunction, the court typically must order the
moving party to provide a security in an amount the court determines would cover damages
sustained in the event a party has been wrongfully enjoined. See Fed. R. Civ. P. 65(c) (“The
court may issue a preliminary injunction or a temporary restraining order only if the movant
gives security in an amount that the court considers proper to pay the costs and damages
sustained by any party found to have been wrongfully enjoined or restrained.”). Here, the Court
did not order Wheel Pros to provide a security. However, “where the party opposing an
injunction order does not request security, the district court does not err in failing to order it.”
Vans, Inc. v. MSCHF Prod. Studio, Inc., 88 F.4th 125, 143 (2d Cir. 2023). Defendants did not
request a security and thus the Court did not err in ordering the preliminary injunction without
one. (See generally, Defs. Mem. In Opp. To Pl.’s Mot. For Prelim. Injunction, ECF No. 28-1;
Defs. Supp. Mem. of Law In Opp. To Pl.’s Mot. For Prelim. Injunction, ECF No. 48.)
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stay” of a preliminary injunction pending appeal (quoting Bell & Howell: Mamiya Co. v. Masel
Supply Co. Corp., 719 F.2d 42, 45 (2d Cir.1983)). A showing of irreparable harm pending the
stay of an injunction cannot be “remote or speculative, but [must be] actual and imminent.”
Dexter 345 Inc. v. Cuomo, 663 F.3d 59, 64 (2d Cir. 2011). “Conclusory assertions” will not
satisfy Defendants’ burden. Id.
Defendants argue that they—and in particular, ASR Motorsport and Lanzello—will be
irreparably harmed if the Court does not stay the preliminary injunction pending appeal due to
the risks of unintentional non-compliance with the terms of the PI Order because it is purportedly
not clear what constitutes “Developments” in Paragraph 5 of the Order, what constitutes
“Confidential Information” as that term is used in the PI Order, and when Lanzello is required to
resign from ASR Motorsport in order to comply with the restrictive covenant not to compete.
(Motion at 22.) Defendants also argue that they will all suffer “irreparable harm simply from
losing their President for a prolonged period of time” while their appeal is pending. (Id.)
Additionally, Defendants argue that they will face irreparable harm because the Unit Grant
Agreement is unenforceable—a contention that I find unpersuasive, as explained above. (Motion
at 23.)
In response, Wheel Pros contends that Defendants fail to provide any support for their
position that “the threat of judicial sanctions resulting from inadvertent noncompliance with an
injunction constitutes irreparable harm.” (Opposition at 3–4.) It also argues that such a threat is
speculative at best. (Id.)
Contrary to Defendants’ position, to the extent Defendants are concerned that the PI
Order fails to provide them sufficient notice of enjoined conduct with respect to the definitions
of “Confidential Information” and “Developments” or the date on which Lanzello is required to
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resign to comply with the non-compete provision of his agreement with Wheel Pros, the proper
course was to file a motion to clarify the terms of the PI Order—not a motion to stay—which
Defendants did not do. See Nat’l Rsch. Bureau, Inc. v. Kucker, 481 F. Supp. 612, 615 (S.D.N.Y.
1979) (“[T]he alleged ambiguity of an order is no excuse. If an order is ambiguous, which this
one does not appear to be, then a clarification should be sought before acts are performed in the
ambiguous area.”); Heary Bros. Lightning Prot. Co. v. E. Coast Lightning Prot., Inc., No. 96-cv-
2796, 2008 WL 11531041, at *4 (D. Ariz. Oct. 10, 2008) (“[W]here there is any doubt, Plaintiffs
may petition the Court for clarification of its order . . . Respondents [have] an affirmative duty to
petition for a clarification, modification, or construction of the Order before performing acts in
the ambiguous area.”).
Moreover, as addressed above, the terms of the PI Order that Defendants perceive to be
vague—“Confidential Information” and “Developments”—are sufficiently clear. Supra § I
(a)(ii). Contrary to Defendants’ contentions, the PI Order itself includes the definition of both
terms in its factual findings and provides significant detail concerning the scope of “Confidential
Information” subject to the preliminary injunction. Moreover, this Opinion and Order clarifies
the relevant definitions consistent with the spirit of the PI Order.
Additionally, Defendants’ purported confusion as to “when Lanzello is required to resign
from ASR Motorsport in order to comply with the restrictive covenant not to compete” is
contradicted by the plain terms of the PI Order. (Motion at 22.) The PI Order includes detailed
factual findings supporting the legal conclusion that “the record shows that Lanzello likely
violated” the non-compete and non-solicitation provisions of the Unit Grant Agreement. (PI
Order at 49; see id. at 8–16.) The PI Order clearly and unambiguously enjoined Lanzello from
immediately working at ASR Motorsport when it ordered that:
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Lanzello is enjoined from owning, managing, controlling, or participating in (as an
employee, consultant or otherwise) any business or entity which directly or indirectly
engages in the Business (as defined in the Unit Grant Agreement), including ASR
Motorsport, in accordance with the terms set forth in the Unit Grant Agreement.
(PI Order at 55 ¶ 2.) Defendants’ contention that the PI Order failed to notify Lanzello when to
resign from ASR Motorsport in order to comply with the five-year non-compete provision is
belied by the plain text of the order itself. See ADT, LLC v. Sec. Networks, LLC, No. 12-cv-
81120, 2018 WL 6978699, at *11 (S.D. Fla. Nov. 16, 2018) (finding that a defendant “cannot
avoid actual notice and knowledge of the injunction by acting in a deliberately ignorant manner
or by consciously avoiding the injunction terms”), report and recommendation adopted, 2019
WL 438998 (S.D. Fla. Jan. 30, 2019).
Defendants also assert that, absent a stay, “Lanzello will lose his livelihood, and ASR
will effectively lose its entire leadership during the pendency of this appeal.” (Motion at 23).
Defendants’ counsel attests that Lanzello’s responsibilities at ASR Motorsport include managing
inventory, ASR Motorsport’s internal systems, the dealer portal site, and the online ordering
system, serving as the signatory on ASR Motorsport bank accounts and as a point of contact for
vendors and accounts, developing and managing “SKU/MSRP/pricing,” and leading the sales
team. (Krezalek Decl. ¶¶ 3–4.) Defendants assert that Lanzello’s “immediate resignation could
plunge ASR into chaos and severely impact its prospects for survival.” (Id. at 25.)
I recognize now, as I did when issuing the PI Order, that during the pendency of this
action, Lanzello may face some hardship from being required to abide by his non-compete
agreement with Wheel Pros and ASR Motorsport may face some hardship from being required to
assign another individual to perform Lanzello’s functions. However, Lanzello exercised his right
to freedom of contract and freely entered into the agreement with Wheel Pros that he would not
compete with Wheel Pros during his employment with the company and for five years following
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any separation. See Unit Grant Agreement at ¶ 9(a); Gen. Mills, Inc., 2020 WL 915824, at *9
(“The Court recognizes, of course, the hardship associated with enforcement of a non-compete
obligation. However, Plaintiff was free to accept employment in a non-competitive industry.”).
Indeed, nothing in the PI Order prevents Lanzello from working in an industry that does not
compete with Wheel Pros in the United States. It was Lanzello’s own “decision to accept
employment [with ASR Motorsport] in precisely the industry in which he worked, and with a
direct competitor” to Wheel Pros, “his previous employer.” Id. More to the point, it was
Lanzello’s own choice to begin establishing the competitor—ASR Motorsport—while he was
employed at Wheel Pros, and to nevertheless remain at Wheel Pros for another nine months
before he was terminated for cause when his competitive activities were finally discovered by
Tiffin. Lanzello freely agreed to the non-compete and non-solicitation restrictions in exchange
for securing continued at-will employment at Wheel Pros at a substantial salary and the grant of
significant equity in the company, both in exchange for his agreement not to compete with
Wheel Pros or to solicit Wheel Pros staff for the duration of his employment with Wheel Pros
and five years after any separation. See July 11, 2025 Hr’g Tr. 350:10–13, 351:10–352:8
(Lanzello testifying he received “a few million dollars” worth of shares in Wheel Pros); Tiffin,
July 10, Hr’g Tr. 130:9–24 (testifying that Lanzello’s salary was “close to a half a million
dollars” in 2023 and 2024); see also Capstone Logistics Holdings, Inc. v. Navarrete, No. 17-cv-
4819, 2018 WL 6786338, at *27 (S.D.N.Y. Oct. 25, 2018) (finding that defendants would not
“suffer significant harm if an injunction is reinstated” because “they were each paid substantial
amounts . . . and they each agreed to participate in the equity incentive plan”), aff’d and
remanded in part, 796 F. App’x 55 (2d Cir. 2020). The factual record also demonstrates that
Lanzello was well aware of the risks associated with violating his non-compete provisions, but
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he chose to do so anyway, thereby causing his termination from Wheel Pros and triggering the
five-year non-compete period. (See Affidavit of Katharine J. Liao “Liao Aff.”, ECF No. 26-2,
Ex. R (Lanzello warning a realtor about mentioning him in connection with ASR Motorsport,
saying: “Need it kept quiet I’m still at wheel pros and don’t want to be sued.”)); Liao Aff., Ex.
HH (“Ok can’t go public. Make sure no name or anything showing please . . . Nobody at wheel
pros can know either . . . I could get sued.”).
Lanzello’s willful, knowing violation of his non-compete agreement counsels against a
finding that Defendants have made a sufficient showing of irreparable harm to Lanzello or ASR
Motorsport from enforcement of Lanzello’s non-compete agreement with Wheel Pros. Dexter
345 Inc. v. Cuomo, 663 F.3d 59, 64 (2d Cir. 2011) (declining to find irreparable harm where
movants “themselves are responsible for some of these purported injuries”). Further, Wheel
Pros’ filing of a motion in February 2025 seeking, among other things, an order temporarily and
preliminarily enjoining Lanzello from working for ASR Motorsport in accordance with the terms
of the Unit Grant Agreement put Defendants on notice that this Court could temporarily or
preliminarily enjoin Lanzello from working at ASR Motorsport during the pendency of this
action or until November 20, 2029, whichever is earlier. (See ECF No. 1 at 24; see also Am.
Compl. ¶ 68 (stating that Lanzello was terminated for cause by Wheel Pros on November 20,
2024); Unit Grant Agreement ¶ 9 (providing that the non-compete restriction applies “for five (5)
years following any Separation” from Wheel Pros).) Defendants do not show how Lanzello’s
resignation in compliance with the PI Order, which was issued nearly eight months later, would
“abruptly decapitate” ASR Motorsport (Krezalek Decl. ¶ 11), when Wheel Pros’ efforts to
enforce the restrictive covenants of the Unit Grant Agreement were a central focus of the
February 18, 2025 motion for a temporary restraining order (ECF No. 1), the May 16, 2025
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preliminary injunction motion (ECF No. 25), the July 10 and 11, 2025 hearing on the preliminary
injunction motion,17 and the parties’ supplemental briefing throughout June through August 2025
(Defs.’ Suppl. Br., ECF No. 48; Pl.’s Suppl. Br., ECF No. 50).
Accordingly, Defendants fail to carry their burden to demonstrate that they will be
irreparably harmed from the enforcement of the preliminary injunction. Instead, the alleged harm
Defendants may experience is the predictable outcome from the enforcement of the agreements
that the Individual Defendants, including Lanzello, freely and willingly entered with Wheel Pros.
c. 	Substantial Injury to Wheel Pros
The third factor courts consider when assessing a motion to stay a preliminary injunction
is whether the issuance of a stay would substantially injure other parties interested in the
proceedings. Mahdawi, 136 F.4th at 449. With respect to this factor, Defendants essentially
argue that Wheel Pros will not be substantially harmed by a stay because any harm Wheel Pros is
currently experiencing cannot get any worse while the appeal is pending. (See Motion at 24
(“Moreover, if the injunction on Lanzello’s employment is stayed, Lanzello will serve as ASR’s
president pending the resolution of this appeal, as he has been since ASR’s inception” (emphasis
added)); id. (“Further, it is clear that Wheel Pros can only suffer so much damage at the hands of
ASR during the pendency of this appeal.”).)
Defendants ignore the factual record and demonstrate as cavalier an attitude with respect
to Wheel Pros’ injuries pending appeal as they did when the Individual Defendants actively
worked to establish ASR Motorsport while employed by Wheel Pros, including by brazenly
disclosing Wheel Pros’ Confidential Information to third parties. As detailed in the PI Order, I
17 (See, e.g., July 10, Hr’g Tr. 34:8–11, 51:14–19, 170:17–171:1; July 11, Hr’g Tr. at 349.)
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have already found that Wheel Pros has demonstrated irreparable harm absent a preliminary
injunction:
Wheel Pros has sufficiently shown irreparable harm in the form of substantial, ongoing
risks: (1) that Defendants will continue to disseminate Wheel Pros’ trade secret
information beyond Defendants to a wider audience and will otherwise irreparably impair
the value of those secrets; and (2) that Wheel Pros will experience a loss of customer
goodwill due to Defendants’ use of Wheel Pros’ trade secrets, solicitation of customers,
and other competitive activities undertaken in violation of the Non-Disclosure
Agreements and the Unit Grant Agreement.
(See PI Order at 28–29.) Moreover, I found that the record on the PI Motion demonstrated that
“Defendants already have disclosed Wheel Pros’ trade secret information to third parties” and
that “Defendants’ challenged conduct has led to the actual loss of Wheel Pros goodwill” with at
least one customer, Rayco. (Id. at 33, 36 (emphasis added).)
Defendants fail to point to evidence in the record or marshal any legal arguments
showing that Wheel Pros would not suffer irreparable harm from a stay of the preliminary
injunction. Accordingly, it would be “logically inconsistent” to now find that Wheel Pros would
not suffer irreparable harm from a stay of the preliminary injunction. Rodriguez ex rel.
Rodriguez, 175 F.3d at 235. Therefore, based on the extensive factual record on the PI Motion
and the record on this Motion, Wheel Pros will face irreparable harm from a stay of the
preliminary injunction.
d. 	Public Interest
The final factor courts consider when assessing a motion to stay a preliminary injunction
is whether the issuance of a stay is in the public interest. Mahdawi, 136 F.4th at 449.
Defendants argue that a stay of the preliminary injunction would not harm public interest
because their appeal “presents genuine questions regarding the enforceability of the Unit Grant
Agreement and how Defendants are expected to comply” with the PI Order. (Motion at 24.)
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Defendants also argue that permitting Lanzello to continue serving as ASR Motorsport’s
president while their appeal is pending will purportedly “advance[] the public policy of
protecting an individual’s ability to support himself and his family financially.” (Id.) In response,
Wheel Pros argues that the public’s interest weighs in favor of denying the requested stay of the
preliminary injunction, primarily because the preliminary injunction upholds the parties’
freedom of contract and further enjoins defendants from engaging in conduct that I have
determined to be harmful, if not unlawful. (Opposition at 17–18.)
Defendants fail to cite any authority supporting the notion that it is in the public’s benefit
to stay a preliminary injunction simply because the parties raised “genuine questions” in
litigating a motion for a preliminary injunction. Indeed, as addressed above, in order to secure a
motion to stay, Defendants must show that the balance of factors—the likelihood of success on
the merits of their appeal, irreparable harm to Defendants, any substantial injury to other parties,
and the public interest—weigh in favor of a stay. Mahdawi, 136 F.4th at 449.
Additionally, notwithstanding the general public’s interest in ensuring that people can
earn a living, “to the extent that [Lanzello’s] success is built on unsavory business practices . . . it
is, of course, not at all in the public interest for it to be perpetuated.” Usherson v. Bandshell
Artist Mgmt., No. 19-cv-6368, 2020 WL 4228754, at *6 (S.D.N.Y. July 22, 2020). Indeed, here,
it serves the public interest to issue a tailored preliminary injunction that prohibits Defendants
from continuing to disseminate and impair the value of Wheel Pros’ trade secrets in violation of
the Individual Defendants’ agreements with Wheel Pros and from engaging in conduct that has
led to the loss of Wheel Pros’ goodwill with customers and will imminently lead to the loss of
goodwill with other customers. This Court held a two-day preliminary injunction hearing and
reviewed a substantial factual record in which overwhelming evidence demonstrated that
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Defendants have (1) misappropriated Wheel Pros’ trade secrets and engaged in conduct that
threatens to compromise the value of those secrets; (2) engaged in conduct that has led to a loss
of Wheel Pros’ goodwill with customers; (3) with respect to the Individual Defendants, violated
the terms of their Non-Disclosure Agreements with Wheel Pros; and (4) with respect to Lanzello,
violated the noncompete and non-solicitation provisions of his Unit Grant Agreement with
Wheel Pros. (PI Order at 29–31.) Issuing a stay that would allow Defendants to continue
benefiting from the misappropriation of Wheel Pros’ trade secrets and that would allow Lanzello
to compete with Wheel Pros and solicit Wheel Pros’ employees in violation of the restrictive
covenants set forth in the Unit Grant Agreement would not benefit the public. See, e.g., IME
Watchdog, Inc. v. Gelardi, 732 F. Supp. 3d 224, 243 (E.D.N.Y. 2024) (finding that the public
interest is serving by an injunction “prohibiting Defendants from further using what the court
finds, based on clear and convincing evidence, are wrongfully obtained trade secrets”).
II. 	Modifying the Preliminary Injunction
Defendants seek a modification of the PI Order only as it pertains to the preliminary
injunction against Lanzello’s continued work as ASR Motorsport’s president. Defendants
requested permission for “Lanzello to continue to serve as ASR’s president for a short period of
time (e.g., until November 14, 2025) so that ASR Motorsport may complete an orderly transition
to a successor,” arguing that Lanzello’s immediate resignation “could plunge ASR into chaos
and severely impact its prospects for survival.” (Motion at 25.) In the alternative, Defendants
request a temporary stay to permit them to move for a stay pending appeal before the Second
Circuit pursuant to Rule 8(a) of the Federal Rules of Appellate Procedure. Id; see also Fed. R.
App. P. 8(a) (“A party must ordinarily move first in the district court for . . . a stay of the
judgment or order of the district court pending appeal.”)
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I decline to modify the preliminary injunction. Lanzello and ASR Motorsport have been
on notice since February 18, 2025 that Wheel Pros has been seeking a temporary restraining
order and preliminary injunction enjoining Lanzello from working for ASR Motorsport. The PI
Order clearly stated that Lanzello must cease “managing . . . or participating in” ASR Motorsport
as of October 2, 2025. (PI Order at 55.) Defendants had nearly eight months to arrange for a
transition of Lanzello’s functions in the event Wheel Pros secured preliminary relief.
Accordingly, I decline to modify the PI Order’s requirement that Lanzello cease working for
ASR Motorsport on October 2, 2025.
For the same reason, I decline to grant a temporary stay to permit Defendants to move for
a stay pending appeal before the Second Circuit. More than three months have passed since
Defendants filed a notice of appeal regarding the PI Order, providing ample time for Defendants
to file a motion for a temporary stay pending appeal under Rule 8 of the Federal Rules of
Appellate Procedure. Defendants could have filed a motion in the Second Circuit to stay the PI
Order pending appeal, but they have not done so. See Federal Rules of Appellate Procedure
(“Fed. R. App. P.”) 8(a) (providing that while a “party must ordinarily move first in the district
court” for a motion to stay pending appeal, the motion nonetheless “may be made to the court of
appeals or to one of its judges” if “moving first in the district court would be impracticable”);
Agudath Israel of Am. v. Hochul, No. 22-38, 2023 WL 2637344, at *2 (2d Cir. Mar. 27, 2023)
(recognizing that a party may file a motion directly before the Second Circuit to stay a district
court’s order ruling on a preliminary injunction before moving in the district court itself).
CONCLUSION
Wheel Pros’ Motion to Stay the preliminary injunction issued by this Court on October 2,
2025 (ECF No. 63) is denied for the reasons explained above. Based on the factual findings and
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legal conclusions set forth in the PI Order (ECF No. 61 at 4–16, 24–55 (factual findings); id. at
24–55 (legal conclusions)), and for the reasons set forth above, the preliminary injunction is
clarified to read, in its entirety, as follows.
CLARIFIED PRELIMINARY INJUNCTION
It is hereby ORDERED that the term “Confidential Information” as used in this Order
shall refer to:
1. 	proprietary drawings of Wheel Pros’ wheel designs, including, but not limited to:
a. 	two Wheel Pros’ wheel designs attached to August 9 and 10, 2024 emails from
Junjie Chen to Lanzello, Art Hale, Jose Valenzuela, and Jeff Claunch; and
b. 	drawings and confidential descriptions of the specifications pertaining to the
wheel drawings attached to August 12, 2024 emails from Junjie Chen to Lanzello,
Art Hale, Jose Valenzuela, and Jeff Claunch; and
c. 	the fact that “Wheel Pros started to use 	” on or
around August 10, 2024, as disclosed in an August 10, 2024 email from Junjie
Chen to Lanzello, Art Hale, Jose Valenzuela, and Jeff Claunch; and
2. 	aggregated data regarding Wheel Pros’ best-selling wheels and their associated fitments,
including but not limited to:
a. 	Wheel Pros’ spreadsheets showing the company’s 100 top-selling SKUs for 2023
and year-to-date top 100 selling SKUs for 2024, including the average selling
price of those SKUs and the corresponding profit margin, which Lanzello
disclosed to Art Hale by text message on July 16, 2024; and
b. 	information contained in the “INNER PURCHASE SKUS.jpg” attached to an
August 10, 2024 email from Junjie Chen to Lanzello, Art Hale, Jose Valenzuela,
and Jeff Claunch; and
3. 	detailed information concerning Wheel Pros’ sales volumes, including but not limited to:
a. 	Wheel Pros’ spreadsheets showing the company’s April 2024 month-to-date sales
revenue by region and April 30, 2024 daily total sales revenue by region,
screenshots of which were sent by Lanzello to Art Hale by text on April 30, 2024;
and
b. 	Wheel Pros’ February 2024 year-to-date sales data, which was texted by Lanzello
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to Art Hale on February 14, 2024; and
4. 	Wheel Pros’ customer lists with customer-specific prices for products, including but not
limited to:
a. 	a Google Docs spreadsheet containing Wheel Pros’ part numbers sent by Ray
Noori to Tire Agent on December 16, 2024; and
b. 	an inventory file sent by Ray Noori to Tire Agent on or around January 31, 2025.
It is further ORDERED that:
1. 	during the pendency of this action, Defendants are enjoined from using, disclosing,
accessing, reviewing or transferring Wheel Pros’ Confidential Information;
2. 	during the pendency of this action, or until November 20, 2029, whichever is earlier,
Lanzello is enjoined from owning, managing, controlling, or participating in (as an
employee, consultant or otherwise) any business or entity, including ASR Motorsport,
which directly or indirectly engages in supplying, manufacturing, marketing, and/or
wholesale distributing after-market wheels, tires or accessories anywhere in the United
States for vehicle models or brands that are supplied, manufactured, and or distributed by
Wheel Pros Holdings, L.P. or Wheel Pros, LLC, or any of their subsidiaries;
3. 	during the pendency of this action, or until November 20, 2029, whichever is earlier,
Lanzello is enjoined from directly or indirectly soliciting, hiring, retaining or engaging
any officer, manager, or employee of Wheel Pros Holdings, L.P. or Wheel Pros, LLC;
4. 	Defendants shall destroy and dispossess themselves of any of Wheel Pros’ Confidential
Information that Defendants still possess or control, subject to supervision and
verification by a neutral third party; and
5. 	during the pendency of this action, Defendants are enjoined from marketing, selling,
exploiting, assigning, or otherwise exercising any rights of ownership or control with
respect to any “Developments,” which are defined as inventions (whether or not
patentable), product designs (whether or not patentable), new technology, Confidential
Information, copyrightable works, mask works, trademarks or other intellectual property
created during the Individual Defendants’ employment with Wheel Pros, including but
not limited to aftermarket wheels and automotive accessories that any Individual
Defendant created or contributed to, in whole or in part, while still employed by Wheel
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Pros that relate to Wheel Pros’ business, or result from or are suggested by any work
performed for Wheel Pros.
Dated: Central Islip, New York
January 13, 2026
________/s/ Nusrat J. Choudhury_______
NUSRAT J. CHOUDHURY
United States District Judge
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