“GT Advanced Technologies Inc. said it needs to settle disputes with Apple Inc. because ‘protracted litigation against one of the largest corporations in the world with over $100 billion of cash would be challenging and expensive,'” Peg Brickley reports for The Wall Street Journal.
“Jilted by Apple as a supplier of sapphire screen material for iPhones, GT Advanced filed for Chapter 11 protection earlier this month and moved to put under seal the explanation of what went wrong between the two companies,” Brickley reports. “Papers filed near midnight Monday say Apple is threatening to crush the small, distressed company with ‘numerous liquidated damages provisions in the Apple Agreements pursuant to which Apple would likely assert millions, if not billions, of dollars in secured and unsecured claims against certain of the Debtors,’ lawyers for GT Advanced wrote.”
“As explained in court and outlined last week by GT Advanced, the settlement gives GT Advanced years to sell the sapphire-manufacturing furnaces to raise money to pay off the Apple debt. Court papers don’t say what it will cost GT Advanced to store, maintain, market and sell the furnaces. The company gets 11 months free rent at the Arizona plant, court papers say,” Brickley reports. “The agreement hangs on getting a court order that orders the destruction of all copies of papers GT Advanced filed with the U.S. Bankruptcy Court in New Hampshire which explain the trouble between the sapphire supplier and Apple, and the reasons for the bankruptcy. Besides striking the papers from the court docket, GT Advanced wants Judge Henry Boroff to order anyone who has copies of the documents to destroy them.”
Much more in the full article here.
Related articles:
Apple ponders future sapphire options, leaves door open for GT Advanced – October 23, 2014
Apple considering other options for Arizona sapphire facility, helping former GT Advanced employees find new jobs – October 23, 2014
GT Advanced announces settlement with Apple; to exit sapphire production – October 23, 2014
Apple and GT Advanced settlement: Ending the madness – October 22, 2014
GT Advanced, Apple ink deal for ‘amicable’ split-up – October 21, 2014
GT Advanced Technologies Inc. suspended by Nasdaq – October 17, 2014
GT Advanced confidentiality hearing with Apple delayed – October 16, 2014
GT Advanced bankruptcy judge challenges Apple’s penchant for secrecy – October 15, 2014
Apple, GT Advanced in secret session with bankruptcy judge – October 9, 2014
Apple supplier GT Advanced: Confidentiality pact rules out bankruptcy explanation – October 9, 2014
Apple ‘surprised’ by GT Advanced’s bankruptcy filing – October 8, 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
What’s the latest on the head GT Advanced guy selling his stock before it imploded? That was real “lucky.”
Maybe if they produced what they said they could, they wouldn’t be in this situation.
Stop blaming Apple.
Apple is no angel and you don’t know what transpired between those two companies. I like Apple and have several of their products but no need to glorify them.
Of course Apple’s no angel, but if GT is going to release statements like this, then they need to be specific about what their problems were. I don’t feel any pity for them One of their execs sold a lot of stock before they went down the toilet. That’s not very ethical. The deserved to fail if they didn’t run their business right.
Who’s glorifying Apple, but any condemnation of them in this matter has little to no substance based upon what we know, yet dome people seem intent upon doing so. Contracts were signed it seems that they could not be fulfilled by the supplier and this resulted in prospective insolvency, that’s about all we know. From what we see of the compromise solution Apple seems to be quite generous though this is likely to preclude sensitive information otherwise being released. As that could give rivals significant insights into Apple’s business and present and future technical and come rial developments it’s hardly surprising they would rather bite the bullet and prevent publication of the facts of the breakdown between them.
They never should have agreed to the terms, but it was a gamble too potentially profitable to ignore.
What about copies of the copies, and then the copies of the copies of the copies?
What about the ones in iCloud?
“… can’t afford to fight Apple…” is just lawyer speak for, “We’re pretty sure we’d lose any attempt to fight Apple.”
They know they can’t win and are just making a feeble attempt to put some spin on it that a few, unknowing “analysts” and “reporters” will jump onto declaring, “See, Apple is only winning this mess because Apple is too big for the little guy (who happens to be the aggrieved party here) to fight.”
Apple’s proposed terms are extremely lenient. “You don’t have to pay us back for a year or more AND we’ll give you a free place to store everything until you do.” The vast majority of large corporations would not be anywhere near as nice about this. Most of them would be something like, “You owe us over $400 million. Pay up.”
No, it’s very true — they can’t afford to fight Apple in this. In any event, there really isn’t any fight to be had. GT couldn’t product what they contracted with Apple to do, and Apple is GT’s primary creditor and the first position creditor, so in any bankruptcy scenario, Apple would receive all of the proceeds of the sale of equipment, and if it became a liquidation, any cash GT had laying around also (I think it had $89 million or so left).
Apple agreed to this settlement only because it permitted Apple to keep all of the contracts, specifications, plans, etc. secret. Otherwise Apple is gaining nothing from this settlement.But keeping its plans and technologies and contracts secret is worth more to Apple than getting some of its money back anytime soon.
So what GT Advanced management is saying is that they are incompetent for signing the contracts with Apple and should be fired.
I agree.
That’s the bottom line and what seperates the men from the not ready for primetime boys.
Still it’s a GTAT’s dog and pony show. They don’t know when to quit… Oh they agree to new terms. And then that’s too much, so they continue to complain.
Two faced GTAT, yes, yes, when at the table. Apple is mean, back stabbing in the hallways.
This is getting silly. It’s about a contract GT Advanced signed with Apple that apparently includes silence regarding the contract. So here we have GT Advanced talking about the contract, but they can’t publish the contract. So they’re whining to themselves, casting vague aspersions at Apple. Grow up.
If they truly believed they could win, they’d sue.