Apple deal with GT Advanced could fall apart if judge unseals records
Without Apple's final payment, GT Advanced's cash balance fell below a certain figure that could have given Apple the right to ask for the immediate repayment of $440 million that it had loaned to its partner. A Chapter 11 filing was the only way that GTA could block Apple from requesting its money back. With talk of pre-arranged stock transactions made by GT Advanced executives prior to the bankruptcy filing, it is doubtful that we will ever learn the entire story for a long time. The factory in Mesa has closed and 727 employees were canned.
Apple and GTA have reached a deal that would allow the sapphire crystal producer to keep its patents, end its exclusivity deal with Apple, and give it the right to sell the 2,000 production furnaces in the Mesa factory. Apple would get a claim for $439 million, backed by the proceeds of the furnace sales, which would have to be completed within four years. Apple would release its former partner from damage claims totaling over $1 billion. A hearing is being held on November 25th to discuss the settlement.
But there is a danger that U.S. Bankruptcy Judge Henry Boroff, in unsealing a statement from GT Advanced Chief Operating Officer Daniel Squiller, could undo the agreement. The settlement between the two companies is predicated on certain documents remaining sealed. GTA attorney Luc Despins pleaded with the court not to unseal the documents, stating that it could allow Apple to walk away from the settlement. "Let us live another day," the attorney begged. Judge Boroff replied that he didn't think that Apple would want the negative publicity it would receive from walking away from the settlement deal, which would most likely result in the liquidation of GT Advanced.