“Bankrupt GT Advanced Technologies Inc. won approval of a settlement with Apple Inc., preventing costly litigation by granting the iPhone maker $439 million in claims against furnaces at a synthetic sapphire plant,” Dawn McCarty reports for Bloomberg.
“U.S. Bankruptcy Judge Henry Boroff said at a hearing in Springfield, Massachusetts, that he would sign an order approving a revised settlement agreement. During a break in the hearing, GT Advanced and Apple made changes addressing concerns the judge raised,” McCarty reports. “The settlement frees GT Advanced — which had reoriented its operations from supplying materials and equipment for solar panels and chips — from some exclusivity agreements with Apple, gives it control of its sapphire-making patents and lets it retain ownership and sales rights for more than 2,000 production furnaces in Mesa, Arizona, according to court papers.”
“Apple will get an approved claim for $439 million secured by the furnaces. GT Advanced has as long as four years to sell them, with proceeds going to Cupertino, California-based Apple,” McCarty reports. “Proceeds of the first 500 furnaces sold will be $169,000 per unit, rather than $200,000. Proceeds for the next 500 will be $224,000 per unit, down from $250,000. Those reductions will defer about $42.5 million to the last round of sales, giving GT Advanced more cash flow. ‘The first ones are easiest to sell,’ Luc Despins, an attorney for GT Advanced, told Boroff. ‘There’s more money left with us initially and there’s more risk for Apple on the back end.'”
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