“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.
Related articles:
Apple sticking with Arizona plan after sapphire supplier GT Advanced falters – November 18, 2014
Did Apple bully GT Advanced Technologies? – November 11, 2014
GT Advanced COO claims Apple used ‘bait and switch’ tactic – November 7, 2014
Court unseals GT Advanced documents: Apple says it ‘bent over backwards’ to help sapphire supplier – November 7, 2014
I seriously doubt Apple forgot to file its security claims against GT Advanced. That’s a simple UCC-1 filing in Arizona and GT’s home state (Delaware?) and would take Apple’s legal team all of 30 minutes to complete and file in both locations. This is just typical complaints from creditors in bankruptcy who want to get paid everything they’re owed, but won’t because the debtor simply doesn’t have it.
Talcum powder will take care of that chaffing, since you all don’t seem to be wearing big boy pants, either. I’ll bet all of the chaffers were hoping to make quick bucks.
Everyone loves Apple’s deep pockets, stand on line assholes
I certainly don’t know the law in Arizona, but I do know that in many places when you are evicted by your landlord, all of the personal property left there becomes the property of said landlord. While that isn’t exactly what happened here, it is close enough that terms of the settlement are being *extremely* generous in allowing furnaces to be sold off to pay at all.
I’m sure someone can straighten me out on the differences. (Bizlaw?)
(And, by the way, it is a law I don’t necessarily agree with, and have been on the renter’s side in a situation where I actually could have sued and won, but I digress…)
Apple loaned GT the cash to purchase the furnaces, to be repaid with future sales to Apple as they produced sapphire. So, the furnaces are GT’s. The settlement forces them to reimburse Apple by selling the furnaces.
Can someone please explain to me how anything Apple did could be called a ‘bait and switch’. That line gets quoted over and over, yet it just doesn’t make any sense.
I agree. It’s a non sequitur.
Smoke and mirrors to distract from their own incompetence
Total ruse. GT Advanced is desperate to safe their hides. They’re going to FAIL. I can hear the ripping sound already.
The company officers already succeeded in bilking investors of stolen money while defrauding Apple and using insider trading to profit when they knew things were going down. The question remains if they will be allowed to get away with the crime, probability is high that they will, sadly.
This is nowhere near over. Now that all the plot twists have been revealed, it’s going to be boring viewing. But the bad guys, GT Advanced, are the ones in bankruptcy court having to defend THEIR behavior. There shall be blood; At least a little.
Apple employs ordinary people, and in the US that means that many of their employees will tend to throw their weight around, or behave arrogantly, because they work for a big and successful corporation.
The “put your big trousers on” comment, if true, illustrates this point perfectly: arrogantly demanding a smaller business agree to unfavourable terms. We don’t know if this was true, but it has a ring of truth to it and Apple needs to ensure that those who negotiate on their behalf do not bully their suppliers. In the long term Apple needs these relationships.
Now whoever was managing this relationship for Apple did a lousy job.
GTAT, the master at bait and switching.
So the COO of GTAT must be complete buffoon.
How exactly can Apple pull a bait and switch if GTAT knew very well they couldn’t make the agreed upon screens in the size required. By their own admission it wasn’t working. Did they expect Apple to just use it no matter what they produced.
Any bet the COO sold stock prior to the bankruptcy and received a very large salary also. Good luck finding a new career bozo!
All the evidence points to Apple being ENTIRELY correct:
In court filings, Apple has called the accusations ‘scandalous and defamatory’ and ‘intended to vilify Apple and portray Apple as a coercive bully.
It’s time to skin the cat. That cat is GT Advanced. What’s a shame is that Apple is going to get screwed one way or the other for GT Advanced’s CON JOB.
‘No GT Advanced, I don’t think anyone sane is going to believe your bullshit anymore. Kick that tramp out of town! You’re fired from the show. Clean out your dressing room and leave the premises immediately. GUARD! Please escort GT Advanced to the door. SCRIPTING! Write GT Advanced out of the show immediately. Use the old plot line ‘died from injuries incurred after driving into a brick wall’. The audience always loves it when the villain suffers a gory death. 😵💥💣