U.S. Trustee and state of New Hampshire: GT Advanced must reveal bankruptcy cause

“GT Advanced Technologies Inc. (GTAT) should be ordered to file a public account of why it filed for Chapter 11 protection, including key transactions with Apple Inc., according to both the U.S. Trustee supervising the company’s bankruptcy and the state of New Hampshire,” Dawn McCarty and Linda Sandler report for Bloomberg. “GT Advanced hasn’t provided an explanation, saying it wants to avoid the risk of incurring $50 million in damages per violation under confidentiality agreements with Apple. Those accords broadly preclude the company from disclosing details about its business with Apple “except to the extent required by law,” according to court papers filed last week.

“‘Public scrutiny of a debtor’s conduct and transparency in the bankruptcy process is essential to fostering confidence among creditors and parties in interest regarding the fundamental fairness of the bankruptcy system,’ the U.S. Trustee, the Justice Department’s bankruptcy watchdog, wrote in court papers yesterday urging a judge to order disclosure,” McCarty and Sandler report. “In seeking to file sealed documents, the company has cited a confidentiality agreement with Apple, which helped to finance the company’s sapphire production without purchasing it for a new mobile phone.”

“In opposing the request, the U.S. Trustee said the company’s explanation of its operations and setbacks isn’t within the scope of commercial information that Congress has said may be protected,” McCarty and Sandler report. “The state of New Hampshire, which filed its objection today, said ‘transparency’ is needed in the case.”

Read more in the full article here.

Related articles:
GT Advanced suggests it could sue Apple – October 10, 2014
GT Advanced blames ‘oppressive and burdensome’ Apple terms in quest to ax sapphire production – October 10, 2014
GT Advanced to request to shut down synthetic sapphire production – October 10, 2014
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

15 Comments

    1. Breeze, wouldn’t the ones nailed by the disclosure of agreement details be Apple? GTAT is already in bankruptcy. They’re already nailed. Also, they’ve made a biggish deal about “boo, we can’t disclose” precisely so that they would be forced to disclose and therefore not have to pay the penalty. Apple has good reason to want to keep the details secret.

      BTW, this CEO is looking more shrewd than clownish. Everything about this is stacking against Apple’s interests. The only way out for Apple will be to bail them out.

      1. Seems like lot of underhanded shit at GTAT and if that is verified, that ceo and his buddies will need to be more than shrewd to keep their asses safe in jail. Nobody put a gun to their head and they need to keep their end of the deal, which no doubt spells out their commitments that they obviously couldn’t live up to. Poor little entitled babies.

  1. “‘Public scrutiny of a debtor’s conduct and transparency in the bankruptcy process is essential to fostering confidence among creditors and parties in interest regarding the fundamental fairness of the bankruptcy system,’ the U.S. Trustee, the Justice Department’s bankruptcy watchdog, wrote in court papers yesterday…”

    This is 100% BS. The “public” does NOT need to know the details.

    The court and trustee need to know all the details, and in some cases the parties directly involved in the case, e.g., creditors, may need to know the details. All of this can be done under appropriate “for counsels’ eyes only” protective orders by the court.

    The “public” does not need to know the details.

    This is turning into a very public witch hunt just because Apple’s name is involved.

    1. You may recall that there was a lot of competition for this plant. I’m betting there were tax incentives involved. That does give the public an interest in knowing if there were lies told to obtain public funds.

      1. BS. The tax breaks Apple got for this plant are public knowledge and on file the the Arizona state government.
        GTA’s contract with apple being made public only serves GTA so they can try to use the court of public opinion against apple. These Guys knew going in what they signed and what they were doing. They could not deliver so they are now whining about the the mess they got themselves into and will do anything to get out of it including giving apple a black eye for no other reason than to get out of there responsibility.

        1. Among the obligations that GT wants to walk away from are the government incentives. Are you suggesting that the people of Arizona don’t have the right to the facts behind getting their taxes ripped off? It is possible to protect Apple’s IP without leaving the public in the dark about what their elected officials knew and when they knew it. This stopped being a purely private matter when Apple and GT sought public assistance.

  2. Again, looks like fraud from just about every angle.

    I would really hate to see people get away with this without serious jail time and total financial loss. If the investors lose everything, then so should everyone from the top down at GTAT.

  3. It seems like this bankruptcy attempt is really just a ploy to cover up some fiduciary shenanigans, whereby Apple and shareholders were mislead that the company had a great advancement and only needed funding to assure success.

  4. What I find interesting is that the CEO planned sales of his shares over the last year.
    This is not of course illegal but it enabled him to cash out prior to any potential failure. Being the head of the company enables him to have a better view of the prospects than anyone else. It is an educated bet to sell your stock before an impeding event but a smart thing to do. After all if the company did success in making product for Apple the board could easily give him more options based on successful results.
    So again not illegal but very shrewd.

  5. The only reason I can see for going public is to play the PR card and attempt to shame Apple into bailing them out. Hopefully, Apple won’t fall for that. They signed the deal, so they’re either incompetent or criminal in how they proceeded. One can hope we don’t have another Judge Koh-type who simply hates Apple and does everything they can do to hurt the company.

  6. Ahh that familiar pestilent smell of Samscum in the air.

    I bet they’d be very interested to know what Apple was up to with the sapphire.

    Makes total sense that the DOJ would come in and provide those trade secrets to a corrupt South Korea company.

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