GT Advanced Technologies, the company that once snagged what could have been a lucrative deal to produce sapphire glass displays for Apple's iPhone 6, appeared in a New Hampshire court on Oct. 9 asking for non-disclosure of its reasons for filing for bankruptcy.
Lawyers for GTAT said in a public hearing that they could not publicly reveal why the company filed for Chapter 11 protection earlier this week and asked the court to keep its documents under wraps because the company is "tied up in knots with confidentiality agreements". GTAT lawyer Luc Despins also said that breaching those agreements could result in $50 million worth of damages to a third party, which was later identified as Apple. He described the unusual non-disclosure request as very complex.
"It's like a Russian doll," Despins says. "You open the first one and there are four more in there."
U.S. Bankruptcy Judge Henry Boroff ended the two-hour hearing with a closed-door session with GTAT, Apple lawyers and lawyers from the U.S. Trustee, which serves as a watchdog in bankruptcy cases. Reuters says Boroff ordered GTAT to immediately file its motion to wind down its sapphire glass operations and allowed the company to keep the details of its agreements with Apple under wraps, except "all such information as shall be reasonably requested to any party in interest and the United States Trustee and, in the debtor's sole discretion, to the public press."
Should GTAT decide to disclose certain information, the judge ordered that any plans to make information public should be disclosed first to Apple, giving time for the iPhone maker to file a motion to block the disclosure if it wishes to.
GTAT owed $145 million to creditors and $435 million to bondholders, who now remain in the dark as to why the New Hampshire-based company filed for bankruptcy on Oct. 6, less than a year after it announced a high-profile $578 million deal with Apple to supply synthetic sapphire for its smartphones.
The deal required Apple to finance the equipment and machinery that would allow GTAT to manufacture the scratch-resistant sapphire displays for Apple's new smartphones, after which the synthetic sapphire manufacturer would have to repay Apple in five years starting 2015. Apple had already laid down a first installment of $439 million but had withheld the remaining $139 million after GTAT, some analysts believe, failed to meet Apple's standards.
Ann Marie Dirsa, a lawyer from the U.S. Trustee's office, did not approve of the non-disclosure request, saying that it makes the record "insufficient for the court to find what the court needs to find."
