GT Advanced Technologies Inc Seeks Permission To Close Sapphire Plant

GT Advanced Technologies Inc Seeks Permission To Close Sapphire Plant

Apple Inc. (NASDAQ:AAPL) supplier GT Advanced Technologies has expressed interest in closing its sapphire manufacturing business, considering the not-so-successful venture of creating screens for the company’s products, as disclosed by court documents. On Thursday, a U.S. bankruptcy judge allowed the supplier to keep its dealings with Apple secret.

GTAT allowed closed session

The decision to keep the details secret came after judge Henry Boroff held a closed session with both companies. The judge also allowed GT Advanced Technologies Inc (NASDAQ:GTAT) to keep the documents explaining the conflict and supply arrangement with Apple sealed, says a report from The Wall Street Journal. The Cupertino-based company is GT’s biggest client and creditor.

The decision to keep the documents sealed may not go very well with GTAT’s  trade creditors, which are owed $145 million, and bondholders, which are owed about $434 million, who were hoping for more details  during the Thursday session. Earlier, GT filed for Chapter 11 bankruptcy, which came as a surprise to many, including analysts and investors, leading to a sharp decline in the company’s stock price.

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GT lawyer Luc Despins said that the company can’t disclose anything, as it is “tied up in knots with confidentiality agreements,” and if it breaches the agreement, it would cost GT $50 million in damages from a third party. Because of the agreement, Judge Boroff held a closed session only attended by representatives for Apple, GT and U.S. Trustee William Harrington, an officer of the Justice Department who is responsible for monitoring the bankruptcy courts.

Apple quiet on proceedings

There has been no comment from Apple over the proceedings; instead, the company repeated its previous statement that it is focusing on saving jobs in Arizona following the bankruptcy filing by GT.

“We will continue to work with state and local officials as we consider our next steps,” said Apple.

Apple and GT have a $578 million financing arrangement that helped in the transformation of the latter from being only a producer of solar power and sapphire equipment to a manufacturer of sapphire material, which had been expected to be used in the new iPhones.

Since Monday’s bankruptcy filing, GTAT’s shares have fallen to less than $1 from $11 a share.

“The company feels terrible about that loss of value and we will work every day, 24/7, to try to recover that value,” Despins said.

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