GT Advanced bond traders drawn to prospect of Apple lawsuits

“Traders are being drawn to bankrupt GT Advanced Technologies Inc. bonds by the prospect of lawsuits to recover money from Apple Inc. and other creditors, lifting the value of lower-ranking debt, according to analysts,” Linda Sandler and Dawn McCarty report for Bloomberg.

“Bonds of GT Advanced, a maker of synthetic sapphire, are currently at around 45 cents on the dollar. They might rise if Apple is forced to give up some of its $439 million in claims, and if litigation takes back $56 million paid to trade creditors just before the bankruptcy, said Joe Sarachek, a managing director at CRT Capital Group LLC in Stamford, Connecticut, which trades bankrupt companies’ debt,” Sandler and McCarty report. “‘This is going to be a field day for the lawyers and accountants,’ he said. Already inching up, the bonds might climb more as disputes are worked out in court, he said.”

“In their filing objecting to the settlement with Apple, a committee of unsecured creditors said the failed sapphire venture cost GT Advanced almost $1 billion. They demanded more information about the proposed accord, saying they didn’t know yet if it was fair and equitable,” Sandler and McCarty report. “The fights with Apple and trade creditors might be resolved at the negotiating table, or in court, Kevin Starke, a CRT analyst, said. A hearing on the settlement is set for Dec. 15 in bankruptcy court in Springfield, Massachusetts.”

Read more in the full article here.

Related articles:
Apple shields information in GT Advanced creditor probe – November 26, 2014
Apple, GT Advanced and the ‘boule graveyard’ – November 20, 2014
Lack of experience, mismanagement doomed GT Advanced’s sapphire adventure – November 19, 2014
GT Advanced Tech creditors chafe at settlement deal with Apple – November 19, 2014
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
GT Advanced blames ‘oppressive and burdensome’ Apple terms in quest to ax sapphire production – October 10, 2014

8 Comments

    1. Buying existing bonds? How is that being a vulture? Some people think the bonds are worth more than the asking price, so they buy them. They may be right, they may be wrong, but there’s nothing sinister about it.

      If I think AAPL is worth $130 a share, but it’s trading at $112, does that make me a vulture if I buy it? That’s all that’s happening here.

  1. …to recover money from Apple Inc. and other creditors.

    NO. These dummies got it backwards. GT Advanced owes APPLE for breaking their contract with them. No more money from Apple, dimwits! Thankfully, Apple was kind and professional about the situation and has allowed GT Advanced time and means to raise some of the money THEY OWE APPLE.

    Am I some kind of genius that I can figure this out? I don’t think so.

    1. While the wording makes it unclear, what they are hoping for is to 1) reduce outstanding debt to their creditors, including Apple, and 2) possibly recover some money already paid to some of those creditors.

  2. If only they could just remove all those businesses that actually make money for the economy and just leave the lawyers to make their money without them eh cutting out the wasteful middle man between the lawyers and their riches.

  3. GTAT, did not lose $1 billion. They didn’t have anything to lose. They lost most of Apples loan though.

    Actually to be like the lawyers, that money belongs to me. I demand my money, now, as soon as possible. It comes to about $300 million, and compensates for the lottery winnings denied to me by the California State Supper Lotto Quick Pick formula, which has proven to be faulty. You see if it worked as anticipated, I would have already won by now.

    That’s the truth your Honor. Apple’s anti competitive monopoly should result in treble damages, therefore I am seeking $1 billion, in loses.

    What’s the connection between the Lotto and Apple? California, you bet-ya.

    I think it goes like that. The logic is real clear.

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