And we'll ask the company that's buying us to allocate $400k as non-compete clause. Then utilize the suspended losses to offset the $400k. Does this make sense?

Generally no under §1060.  You can't alter characters of the income by arbitrarily allocating sales proceeds to non-compete by selling the assets at less than FMV.

As my friends suggest, you should engage a competent tax professional to assist you with this transaction.  There is obviously more to this than the initial information you provided in your two posts.