GT Advanced Technologies Inc fka GTAT

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GT Advanced 'On the Cusp' of Settlement With Apple -- Update
11:50a ET October 21, 2014 (Dow Jones) Print

GT Advanced 'On the Cusp' of Settlement With Apple -- Update
By Peg Brickley
GT Advanced Technologies has, for the third time, asked a court to push back the deadline for Apple Inc. to state its case for keeping secret the causes of GT Advanced's bankruptcy.
In court papers filed Tuesday, GT Advanced asked for an extension until noon, because "the parties are on the cusp of a consensual global settlement" in the fight for information about what happened between the smaller company and Apple, which had been considering using GT Advanced-made synthetic sapphire material in the screens for its iPhone.
"We're optimistic that in the next hour or so we will have a signed settlement agreement with Apple. Optimistic, no guarantees of that," said Luc Despins, attorney for GT Advanced, speaking at the start of a court hearing. If and when there is a deal with Apple on unsealing key bankruptcy court documents, Mr. Despins said, the terms will be spelled out. The proposed deal, he said, "resolves a lot of the issues before the court" when it comes to explaining why GT Advanced tumbled into bankruptcy.
GT Advanced and lawyers for the official committee of unsecured creditors in GT Advanced's bankruptcy didn't respond to questions Tuesday about who is involved in the "global settlement." The continued sealing has been challenged by Dow Jones & Co., publisher of The Wall Street Journal, by U.S. Trustee William Harrington of the Department of Justice and by New Hampshire Attorney General Joseph Foster. A representative of the U.S. Department of Justice said Tuesday Mr. Harrington isn't a party to the potential settlement.
In a filing earlier, the official creditors committee indicated it had reached a deal with Apple on the sealing issue. The panel said it had "recently negotiated a comprehensive confidentiality agreement with the major stakeholders that will provide the Committee with full access to all necessary information." Lawyers for the committee haven't responded to requests for more details on the agreement with Apple on the sealing.

At Tuesday's hearing, GT Advanced adviser William Campagna said "two or three" of the vendors that hold seats on the official creditors' committee are in line for a share of a proposed $25 million "critical trade" payment fund, designed to keep important suppliers happy. GT Advanced has asked to keep secret the names of the businesses that will receive immediate payment on back bills, but said it would share the names with the official committee.
Apple could be a prime target in GT Advanced's Chapter 11 case, one where debts top $1.3 billion and the plan is to exit the business that has brought in some 60% of the revenue, the manufacture of synthetic sapphire screen material. That depends on what is in routine court filings setting out the causes of GT Advanced's sudden tumble into Chapter 11 bankruptcy.
What little is known is that Apple was involved in a $578 million financing arrangement that set GT Advanced up in the business of making the screen material. Instead of GT Advanced's sapphire, however, the new generation of iPhones was sent out with screens made from a Corning Inc. material.
GT Advanced's move to get out of the sapphire business, with planned plant closures in Massachusetts and Arizona, is also set for decision at Tuesday's hearing. Apple has said it would like to preserve jobs at the Arizona manufacturing operation. Mr. Despins, speaking in court, said the proposed settlement with Apple would ease the second half of Tuesday's hearing, which includes both the plant closures and the continued secrecy.
In a closed-door session earlier this month, Judge Henry Boroff ordered key bankruptcy documents sealed, bowing to GT Advanced's arguments that public discussion of its arrangement with Apple could bring a $50 million damage award down on GT Advanced's head. After conferring with Apple and GT Advanced, with a lawyer from the Justice Department present, the judge permitted GT Advanced to file under seal a supplemental declaration explaining the bankruptcy. Monday, he allowed GT Advanced to push back Apple's deadline for explaining the need for confidentiality, from noon to 5 p.m. Papers that were supposed to be filed at 9 a.m. will now be filed at noon, hours into the hearing that has begun in the U.S. Bankruptcy Court in New Hampshire.
Write to Peg Brickley at [e-mail]

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