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Sapphire supplier wants to expose details of its deal with Apple

Gregg Keizer | Oct. 15, 2014
Apple's confidentiality agreements go too far, put other creditors at a disadvantage, GT Advanced Technologies argues

sapphire components
GT Advanced Technologies was to supply Apple with scratch-resistant sapphire glass, but announced Oct. 6 it's filing for Chapter 11 bankruptcy.

GT Advanced Technologies, the company that was to supply Apple with scratch-resistant sapphire, has asked a federal bankruptcy court to make public confidential information that would describe its partnership with Apple and explain how GT collapsed.

Previously, those documents had been filed in redacted form by GT. But in a motion made on Friday, GT asked the court to order it to file unredacted versions of several documents.

"GTAT believes that, in the interest of their creditors, equity holders, and other stakeholders, as well as to ensure an open, transparent, and fair process in these Chapter 11 cases, unredacted versions of the Supplemental First Day Declaration, the Motion to Reject, the Wind Down Motion, and the Motion to Expedite, should be filed," GT's lawyers wrote.

"Although institutions like Apple frequently desire to keep their entire business operations confidential, that position creates significant logistical problems in the Chapter 11 context," GT continued in its motion. "While parties may have a legitimate interest in protecting their trade secrets because disclosure of the 'secret sauce' reduces the value of a business, many times the information for which protection is sought does not require the level of protection requested."

GT said it had struck out parts of those documents it has filed so far because it was afraid Apple would penalize it under the terms of the confidentiality agreements it signed with the Cupertino, Calif. company last year. According to GT, each violation of those agreements would require it to pay Apple $50 million.

To avoid those penalties, GT requested that the court order it to file unredacted versions of the documents.

"The Confidentiality Agreement, however, does permit the recipient of Confidential Information to disclose such information 'to the extent required by law,'" GT said (emphasis in original).

GT contended that the confidentiality Apple demanded would put other creditors at a disadvantage because only Apple would have the complete picture. "Blanket confidentiality for all matters relating to one party in the Chapter 11 case risks allowing that party to have disproportionate control over the case," GT asserted.

If the court does not grant its motion, said GT, the alternative was to let it file unredacted versions of the documents under a court seal of secrecy.

But GT argued most strenuously that it was in everyone's interest -- except, presumably, Apple -- to make public the details of its dealings with Apple. "The Court should carefully and skeptically scrutinize whether the confidentiality required under GTAT's agreements with Apple require sealing the [documents]," GT said.


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