“Creditors of GT Advanced Technologies complained in a bankruptcy court filing that the sapphire company may have gotten too little in its proposed settlement with Apple Inc over legal claims stemming from a deal to supply sapphire screens,” Tom Hals reports for Reuters. “GT Advanced’s chief operating officer has said in court papers that the iPhone maker pulled a “bait and switch” to force the sapphire maker into a money-losing deal in 2013.”
“After the bankruptcy filing, Apple agreed to release GT Advanced from the deal and allow it to sell more than 2,000 sapphire furnaces located in Mesa, Arizona,” Hals reports. “The agreement needs approval by U.S. Bankruptcy Court Judge Henry Boroff, who has been hearing the Chapter 11 bankruptcy case in Springfield, Massachusetts.”
“Holders of GT Advanced’s notes, including Aristeia Capital and an affiliate of Wolverine Asset Management, said in court papers the ‘extraordinary allegations against Apple … call into question the adequacy of the settlement agreement,'” Hals reports. “The noteholders cited allegations that Apple breached its contract and acted unfairly as GT Advanced’s lender. The noteholders also said Apple’s claims on GT Advanced’s equipment may be unsecured. This would put Apple among the last creditors to be paid, not the first as Apple’s deal anticipates. Apple has denied GT Advanced’s allegations. In court filings, Apple has called the accusations ‘scandalous and defamatory’ and ‘intended to vilify Apple and portray Apple as a coercive bully.'”
Read more in the full article here.
MacDailyNews Take: GT Advanced tried to play with the big boys and couldn’t deliver the goods. They signed a contract with Apple. GT Advanced failed to live up to their end of the deal. It’s that simple.
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Court unseals GT Advanced documents: Apple says it ‘bent over backwards’ to help sapphire supplier – November 7, 2014