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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

Apple has not filed a rebuttal to GT's motion -- it has until the end of business on Tuesday -- but it would almost certainly argue against publicizing its business partnership.

While GT's motion said nothing about other motives -- not a surprise -- GT may want to take the cover off Apple's practices to retaliate against its partner. In other Friday filings, for example, GT claimed its agreements with Apple "imposed oppressive and burdensome terms and obligations on GTAT" and that it should be freed of those agreements because they were eating into what cash it had to the tune of $1 million per day.

In that second filing, GT also implied that it would, once it had reorganized using Chapter 11, take other actions against Apple. "GTAT believes that it has many claims against Apple arising out of its business relationship with Apple," the company said.

GT announced it was filing for Chapter 11 on Oct. 6, surprising investors, creditors, and according to Apple, even its partner. Last year, the two companies struck a deal under which Apple would provide a $578 million interest-free loan so that GT could purchase equipment to produce large quantities of sapphire material.

GT was also to lease an Apple-owned facility in Mesa, Ariz.

At the time of its signing, the deal triggered speculation that Apple would use the sapphire as touch display covers for its iPhone, particularly the then-anticipated larger-screen model. While that didn't come to pass -- according to tear-down experts, both the iPhone 6 and 6 Plus used Corning's Gorilla Glass 3 instead -- the mid- and top-tier Apple Watch lines are to use sapphire as their face-covering crystals.

The bankruptcy court has scheduled a hearing on Wednesday to discuss a number of GT's motions, including the one that would submit unredacted versions of the documents GT into the public record.

 

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