GT Advanced creditors to gain access to Apple documents in settlement probe

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As Apple and would-be sapphire supplier GT Advanced Technologies come closer to a settlement following the latter’s recent bankruptcy announcement, GT’s creditors will get to take a look under the wraps of the secretive Cupertino tech giant.

As noted earlier today by the Wall Street Journal, Apple will provide GT’s creditors with documents regarding the companies’ arrangement in response to inquiries attempting to determine whether the proposed settlement is fair, or whether Apple is trying to take advantage of the situation.

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More details of Apple’s GT Advanced sapphire deal make it crystal clear how things fell apart

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Photo via WSJ

The Wall Street Journal has revealed key details of the failed deal between Apple and sapphire supplier GT Advanced Technologies that show why the agreement collapsed and how GT managed to run itself into bankruptcy while trying to meet Apple’s standards.

A previous report from the Journal revealed that GTAT had been unable to provide the iPhone 6 displays it had promised Apple, but now we have even more information on why that demand was so hard to meet.

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GT Advanced creditors complain about unfair settlement as Apple commits to repurposing Mesa factory (Update)

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In the aftermath of GT Advanced filing for Chapter 11 bankruptcy protection, the sapphire maker reached a $439 million settlement with Apple in which the supplier will repay the iPhone maker up to $290,000 per furnace sold. GT Advanced creditors aren’t happy with the proposed settlement, however, arguing that the sapphire company may have received too little in the deal. Read more

GT Advanced claims Apple used ‘bait-and-switch strategy’ and said to ‘put on your big boy pants and accept the agreement’

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Following a court order that documents be unsealed regarding the ill-fated partnership between Apple and sapphire crystal glass maker GT Advanced, a number of interesting anecdotes surrounding the tumultuous relationship have been exposed. In an unedited affidavit, GT Advanced COO Daniel Squiller claimed that Apple used a classic “bait-and-switch” strategy to secure its deal with the now-bankrupt supplier. Read more

GT Advanced reaches amended settlement agreement with Apple, will repay up to $290,000 per furnace sold

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GT Advanced announced this afternoon that it has reached an amended settlement agreement with Apple related to the sapphire crystal glass manufacturer’s recent bankruptcy filing, in which both parties have agreed to waive the condition that GT Advanced’s declaration on October 8th remain under seal and expunged. Meanwhile, GT Advanced has filed a Form 8-K with the U.S. Securities and Exchange Commission that provides further details about the recent fallout between Apple and GT Advanced. Read more

GT Advanced COO discusses Apple’s sapphire fallout, here are the interesting bits

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While lawyers for bankrupt sapphire supplier GT Advanced confirmed previously that it had reached an agreement to repay Apple approximately $439 million, many details regarding what exactly went wrong in the partnership had not been disclosed publicly. Today we get what might be the clearest explanation yet of what happened between the two companies leading up to GTAT filing for Chapter 11 bankruptcy last month.  In a declaration filed by COO of GT Advanced Daniel Squiller with the courts yesterday (via Fortune), the company outlines previously sealed info regarding its deal with Apple and terms of the deal that lead to GT’s bankruptcy filing.

When GTAT initially entered into negotiations to sell sapphire furnaces to Apple, it had no sense that, having borrowed hundreds of millions of dollars to pay for the components of more than 2,036 sapphire furnaces, it would end up being unable to meet its cost and production targets for reasons that it believes were beyond its control as well as unforeseen difficulties in scaling its technology to 262kg boules to meet evolving product specifications.

While noting that the deal was “an ambitious transaction for the production of sapphire in quantities, size and quality never before achieved,” the document reveals a number of strict terms Apple imposed in the deal that the company describes as limiting its ability to achieve Apple’s requirements for sapphire production. Here’s a few of the more interesting bits: Read more

GT Advanced informs over 700 Mesa, Arizona employees that they will be laid off by December 15

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Apple’s bankrupt former sapphire supplier is seeking to shut down its Mesa, Arizona plant and has informed 727 employees that they will be laid off between today and December 15th, according to AZ Central. The breakdown of the jobs being cut includes:

…524 production workers, 108 technical positions, 70 management jobs and 25 administrative jobs, according to the notice signed by Linda Luman, vice president of human resources for GT.

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GT Advanced COO sold $1.2M in shares before bankruptcy, Apple asks court to seal documents

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Apple is seeking to keep its involvement in GT Advanced’s Chapter 11 bankruptcy filing secret as it reportedly asked courts to file its objections in the case under seal. Bloomberg reports that Apple has requested permission to keep its comments in the case secret to avoid disclosing “confidential research, development, or commercial information regarding Apple’s business processes.” Read more

GT Advanced court filings reveal $50M penalty Apple imposes for leaking product information

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Not much is known about Apple’s deals with its suppliers, but court filings by former sapphire supplier GT Advanced reveal that the contract included a $50M penalty for any leak of Apple product information, reports the Financial Times.

While the amount of the penalty clause may vary according to the size of the supplier, it seems likely that a substantial leak penalty is a standard condition of supplying product components to Apple – though the number of leaks over the iPhone 6 suggests that such penalties offer limited protection.

Contracts between Apple and its suppliers will undoubtedly be subject to strict non-disclosure agreements, but lawyers for GT Advanced are asking the court to allow details to be made public …  Read more

WSJ: Apple deal with GT Advanced broke down over inability to provide iPhone 6 displays

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The Wall Street Journal has published new information about the breakdown of a deal between Apple and GT Advanced Technologies Inc. that led the latter to file for bankruptcy earlier this week. As was previously noted, Apple withheld a $139 million payment from the sapphire supplier, though the exact reasoning was unclear.

In a research note released yesterday, KGI confirmed that GTAT was Apple’s first choice for these displays because the company had created a process that provided superior drop test results. Now the Journal reports that the payment was withheld after GT Advanced failed to meet Apple’s requirements for the iPhone 6 display.

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KGI: GTAT bankruptcy unlikely to have impact on Apple Watch, future of sapphire iPhones uncertain

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KGI has published a new report clarifying that the recent announcement that Apple’s sapphire supplier had filed for bankruptcy will likely have no impact on the production of the comapny’s sapphire display-equipped wearable. According to KGI, GT was mainly contracted to create the sapphire crystal displays for the iPhone 6 and 6 Plus.

The reason Apple partnered with GT Advanced on the iPhone displays was related to the size of the screens. Because GT was the best equipped to manufacture a display the size of the new iPhone models. However, because the Apple Watch uses a smaller display, other companies are able to produce the covers as easily as GT. This is also why the Touch ID sensor and iPhone cameras, which both use a sapphire lens, will also be unaffected.

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More details on GT Advanced bankruptcy come to light: Apple withheld $139 million, GT CEO unloaded stock

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Apple’s sapphire processing plant in Mesa, AZ

The Wall Street Journal has cast some more light on recent reports that Apple’s sapphire supplier had declared bankruptcy earlier this week. According to the Journal’s report, Apple withheld a payment of $139 million from GT Advanced, though currently there’s no indication of why this decision was made.

In another interesting revelation, the Journal also discovered that the CEO of GT Advanced, Thomas Gutierrez, unloaded all of his stock in the company in a sale just one day before the iPhone 6 was unveiled. The device was widely expected to use sapphire supplied by GT for its displays. GT Advanced had enjoyed a rising stock price that had nearly doubled since initial rumors of a collaboration on the iPhone 6 started swirling.

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