“GT Advanced Technologies Inc. (GTAT) plunged more than 17 percent in after-hours trading after a judge told the bankrupt Apple Inc. supplier to immediately file its motion to shut down synthetic sapphire production,” Dawn McCarty reports for Bloomberg. “”
“U.S. Bankruptcy Judge Henry Boroff’s order followed a request by GT Advanced to file certain documents under seal. It had requested the secrecy to avoid violations of confidentiality agreements that it said could have cost it millions of dollars in damages. Boroff said the company can keep the details of its dealings with Apple confidential and gave GT Advanced permission to file documents under seal that outline its liquidity crisis,” McCarty reports. “A closed-door hearing with GT Advanced and lawyers for Apple and the U.S. Trustee was held after Boroff ended yesterday’s two-hour public hearing. Boroff set a hearing for Oct. 15 in Springfield, Massachusetts, to consider the motion.”
“GT Advanced will also seek permission to reject certain contracts and unexpired leases in connection with the wind down as well as approval to pay an employee incentive plan, court papers show,” McCarty reports. “Although Boroff said the motions must be presented unredacted, he did give permission to withhold some information from the public.”
Read more in the full article here.
Related articles:
Shattered sapphire dreams at GT Advanced – October 8, 2014
Apple’s withholding of $139 million payment led to GT Advanced bankruptcy filing – October 7, 2014
GT Advanced CEO sold 9,000 shares the day before Apple’s iPhone 6/Plus event – October 7, 2014
Law firms launch investigations into possible violations of federal securities laws by GT Advanced – October 7, 2014
Analyst: Apple may take possession of sapphire furnaces from GT Advanced – October 7, 2014
Apple to provide debtor in possession financing to GT Advanced? – October 7, 2014
Investors stunned over GT Advanced bankruptcy filing – October 7, 2014
GT Advanced files for chapter 11 bankruptcy court protection – October 6, 2014
Apple and GT Advanced rampup sapphire production in Mesa – August 11, 2014
GT Advanced expects sales of sapphire production tools to boost profit; shares surge – August 5, 2014
Apple and GT Advanced open second sapphire plant in Salem, Massachusetts – June 19, 2014
Apple patents method for embedding sapphire displays in LiquidMetal device chassis – May 27, 2014
I will be glad when the full story about this hits. Some people are blaming this on Apple for withholding a large payment that was due because of GT didn’t meet the requirements. That’s unfair. GT was probably just not run very well. If they were, they wouldn’t be in this trouble, and they would have met their commitment to Apple.
Agree, it’s obvious GT was not run optimally which is why Apple made the oublished deal inthe first place.. This was an unusual deal and there has to be more to the picture than meets the eye. the factthat Apple was caught by surprise woth the bankrupcy filing might mean that it was not aware ofhow inneficiently GT was run and it will be interesting to see if Apple gets involved more in daily operations, which will be to both companies advantage.
Another drama for the parasitic press to jump on without thought…
I don’t know, I think we shouldn’t be too quick to jump on the “they clearly weren’t run very well or else they wouldn’t be filing for bankruptcy.” They are trying to develop sapphire glass at an unprecedented level. It’s a tricky material to work with, and it’s likely they ran into some technical difficulties that have taken more time and money to overcome than anticipated. It happens frequently when developing new processes and materials. I’m not sure anyone is to blame necessarily, and with some debt flexibility they may be fine.
This is about as bad as a bankruptcy can get. It could be bad for Apple if it delays the production of the iPhone 6/6+ due to no touch ID button or the upcoming iPad or even Apple Pay.
The only thing worse I can think of right now is someone else outbidding Apple to buy the sapphire making equipment in bankruptcy court.
I for one, am totally confused on who currently owns what. I originally thought GT Advanced was making sapphire for Apple. Then a few days ago, I changed my opinion to GT Advanced was making machines to make sapphire to be put in an Apple owned factory in Arizona. Can someone straighten me out?
Apple owns the facility and the equipment.
The next concern is, does this affect the Watch and the sapphire it needs?
As I indicated before.
It is very possible, a lot of money came from somewhere else, effectively paying GTAT Execs to stop production. Some very underhanded things have happened of late, and I wouldn’t put it past Apple competitors to pay $1 Billon, as a cheap expense to kill a product, before it can get out the door.
Apple has keenly tied up production to the detriment of others, and likewise this is another tactic, against Apple.
++This++
I mentioned this on here before, vis a vis the topic of Apple’s iOS8 rollout – there are entities actively trying to undermine Apple in whatever way they can, and it’s not just corporate espionage (though that is being utilized). Apple’s latest hardware & software with it’s unprecedented security features have pissed off a lot of people in the national security sphere, and they 1] want to delay or derail their adoption as much as possible, and 2] punish Apple for even bringing them to the consumer in the first place, and 3] send a message to any other companies that are thinking of following in Apple’s footsteps.
First, to reiterate: The iOS8 update was hacked, in transit between the software engineers living throughout the world who worked on it most likely, or maybe compromised at the source (the engineers themselves or their equipment used to work on it). The response I got when bringing this up before was “tinfoil!!”, but think people – does anyone really believe Apple wouldn’t/couldn’t keep the phone software on a smart phone working, version to version? That’s kind of ‘Priority #1’. The only way that gets messed up is if someone messes it up on purpose.
To drive the point home a bit more, consider it isn’t just domestic actors at work. China has held up release of iPhone6 & 6+ until recently. Why would that be, do you think, in a country more renown than even the U.S. for surveilling it’s people? Because Apple didn’t expect to sell so many in the world’s most populous country and dropped the ball on production? Please, The government has been tearing down the devices and dissecting the software, doing whatever possible to compromise them both, before the release. A large subset of China’s population with encrypted communications amongst themselves is something the PRC can’t be comfortable with, to say the least.
And now this GTAdvanced situation – most of the reasoning I’ve heard as to what happened here revolves around the idea that ‘Apple didn’t know how bad things were at GTA’. Ridiculous. The amount of due diligence that goes on with these types of deals generally, argues strongly against that possibility. Apple’s track record for the last decade in such matters specifically, all but makes it impossible. That leaves 3rd party actors behind the scenes, causing and/or convincing GTA’s leadership to going down this road, as the most likely scenario. And, given who has become most upset with Apple lately, and who has the deep pockets and strength of intimidation needed to pull something like that off, one guess, of a three letter acronym, beginning with N and ending with A, is where I’d put my chips as to who that is.
At the risk of sounding more like a fanbois than I’ve ever been, my suggestion is to support Apple. Update your phones as soon as the bugs are squashed & buy the latest hardware you can afford. And convince others to do the same. Only mass support of Apple now, when they are finally doing the right thing, will keep them doing it in the face of the resistance they are getting now, and will continue to get in the future.
Did anyone stop to consider that this may be a move on GT Advanced’s part to pressure or corner Apple? Why else would they want to cease production and stop generating revenue.
It seems fishy to me.
GT Advanced may have signed a deal with Apple that they could not honour. Rather than take it on the chin, they pull this move to pressure Apple when they are vulnerable.
They may think they are smart but look what happened to Samsung.
“GT Advanced will also seek permission to reject certain contracts and unexpired leases in connection with the wind down..”
anyone want to take a guess at which contract and lease they want to reject?? this is beginning to sound fishy to me…