Apple sapphire partner GT Advanced asks bankruptcy court to keep confidential documents secret
As it makes its way through the bankruptcy process, GT Advanced Technologies is hoping to keep as much of the proceedings out of the public eye as it can, asking the court for a private hearing, and also to keep confidential documents sealed.
The requests made by GT Advanced Technologies to a New Hampshire bankruptcy court were revealed on Thursday by Reuters. Specifically, the company requested that key documents related to an unnamed third-party be kept secret.
Though GT Advanced didn't name who that third-party might be, it's reasonable to presume it could be Apple, who made a significant half-billion-dollar deal with the sapphire maker last year. GT Advanced said that if the documents were to be made public, it may have to pay damages due to existing confidentiality agreements.
GT Advanced also reportedly asked the New Hampshire court for an "in camera" hearing, which would not be open to the public.
Little is actually known about how and why GT Advanced burned through its cash and filed for bankruptcy, though rumors have been swirling all week since the company made its announcement on Monday. Even Apple issued a rare public statement to say its partner's bankruptcy was "surprising."
It was a year ago that Apple announced a $578 million prepayment to GT Advanced Technologies for supply of advanced sapphire material. The company currently uses scratch-resistant sapphire in its iPhone lineup, protecting the Touch ID fingerprint sensor and rear camera lens, while next year two out of the three Apple Watch models will also feature the material.
GT Advanced's deal with Apple apparently fell apart, however, as the company announced on Monday that it had filed for bankruptcy. Subsequent reports have indicated that Apple withheld a $139 million payment to GT Advanced for unknown reasons, though rumors have suggested the company was unable to keep up with Apple's supply needs.
On Wednesday it was said that Apple attempted to help GT Advanced qualify for its final $139 payment, working with the partner in an effort to meet certain technical milestones. But despite Apple's help, the sapphire maker failed to meet the required goals stipulated in its contract.
The requests made by GT Advanced Technologies to a New Hampshire bankruptcy court were revealed on Thursday by Reuters. Specifically, the company requested that key documents related to an unnamed third-party be kept secret.
Though GT Advanced didn't name who that third-party might be, it's reasonable to presume it could be Apple, who made a significant half-billion-dollar deal with the sapphire maker last year. GT Advanced said that if the documents were to be made public, it may have to pay damages due to existing confidentiality agreements.
GT Advanced also reportedly asked the New Hampshire court for an "in camera" hearing, which would not be open to the public.
Little is actually known about how and why GT Advanced burned through its cash and filed for bankruptcy, though rumors have been swirling all week since the company made its announcement on Monday. Even Apple issued a rare public statement to say its partner's bankruptcy was "surprising."
It was a year ago that Apple announced a $578 million prepayment to GT Advanced Technologies for supply of advanced sapphire material. The company currently uses scratch-resistant sapphire in its iPhone lineup, protecting the Touch ID fingerprint sensor and rear camera lens, while next year two out of the three Apple Watch models will also feature the material.
GT Advanced's deal with Apple apparently fell apart, however, as the company announced on Monday that it had filed for bankruptcy. Subsequent reports have indicated that Apple withheld a $139 million payment to GT Advanced for unknown reasons, though rumors have suggested the company was unable to keep up with Apple's supply needs.
On Wednesday it was said that Apple attempted to help GT Advanced qualify for its final $139 payment, working with the partner in an effort to meet certain technical milestones. But despite Apple's help, the sapphire maker failed to meet the required goals stipulated in its contract.
Comments
Little is actually known about how and why GT Advanced burned through its cash
I thought we knew exactly where this money went. To purchase equipment to manufacture sapphire. It was a secured loan by Apple, with the production equipment being the security.
Total BS.
GTAT is full of scammers and FRUADS and they want to hid this as long as possible from shareholders.
GTAT CEO is a total crook.
On August 8th he said GTAT would have $330M in cash by year end and revenues of $700M.
Are you telling me SO MUCH has changed since then? BS. He's a flat out liar. He knew on August 8th the company was in BIG TROUBLE but he refused to disclose this to shareholders so he could sell his stock for $18 a share a few weeks latter.
You do know that the Form 4 clearly says it was part of a pre-existing 10b5-1 plan that was put in place in March 2014 right?
So,
GTAT had a contract with Apple to supply sapphire screens.
Got loans from Apple to expand capacity to meet demand.
The technical milestone was not met so the GTAT did not get the last part of the loan.
And Apple will not buy GTAT's sapphire until the "technical milestone" was resolved.
GTAT bet the company on Apple's order and could not deliver in time.
Maybe Apple will take possession of the company and install a Phil Schiller puppet regime.
Puppet? A lot of intelligence went into that comment, right?
Well, we may see Apple as a creditor in possession as a result of this filing, at least as to the new plant and equipment. Apple is not a vulture investor of GTAT, so we may see Apple solving the production problems GTAT was having. Good for both companies. But, it would have been better if this had not occurred.
Behind this all, for those of us not knowledgeable on the technology, there is this concern that either the science or the engineering involved is not adequate -- that what Apple was trying to do is not attainable at the present.
When using a term like "puppet regime" in this context the humor was implied, however i won't fault you for not picking up on it.
Significant details need to come out on what actually happened to GTAT.
However, business involves management taking risk. Typically, the more significant the opportunity for massive profit and growth, the more significant the risk.
GTAT was developing a product segment that effectively made them a pioneer in terms of large saphire components. Further, GTAT has never been in the finished manufacturing space for sapphire, let alone large sapphire. Untested manufacturer with an untested process.
The investment in manufacturing large sapphire based components was massive relative to GTAT's access to capital.
Any material misstep was going to put GTAT into financial distress.
Did anyone really think success relative to what GTAT was attempting was guaranteed?
Like Natalya Poklonskya in Crimea?
So,
GTAT had a contract with Apple to supply sapphire screens.
Got loans from Apple to expand capacity to meet demand.
The technical milestone was not met so the GTAT did not get the last part of the loan.
And Apple will not buy GTAT's sapphire until the "technical milestone" was resolved.
GTAT bet the company on Apple's order and could not deliver in time.
Certainly what it sounds like to me ... and then add in the appearance of the CEO cashing out early (as I now understand it, these were scheduled sell-offs).
But there seems to be a good segment of people that are laying all the blame on Apple
The sapphire growth and manufaturing is more expensive and complicated then many know to the point of being a deterrent.
I was part of a sapphire growth and manufactuing facility for nearly 10 years in the early 2000's (we actually did business with GTAT as they are now called, years ago). The Kyropoulos furnaces facilities themselves are complicated requiring the reliability at a minimum of that of hospitals or large data centers due to the tight tolerances required to run resistive heating furnaces in which each crystal, depending on size, takes sometimes 7 days to grow. The indirect material, raw material, and crucibles are extremely expensive and sometimes, very difficult to get a hold of and fabricated. Any "bump" in voltage or temperature, much less an inexperienced grower, and you will suck the funds dry in short order ending up in a crap pile of aluminum oxide. I've seen it happen.
Throwing money at company/new facility like this and watching it evaporate isn't a stretch in this environment if they were over their heads in IMO. Agree that GTAT new it was coming though....like a runaway train.
It will be interesting to see who Apple turns to.
Total BS.
GTAT is full of scammers and FRUADS and they want to hid this as long as possible from shareholders.
GTAT CEO is a total crook.
On August 8th he said GTAT would have $330M in cash by year end and revenues of $700M.
Are you telling me SO MUCH has changed since then? BS. He's a flat out liar. He knew on August 8th the company was in BIG TROUBLE but he refused to disclose this to shareholders so he could sell his stock for $18 a share a few weeks latter.
The only reason GTAT wants to hide the truth is so shareholders BLAME Apple for their failures.
The truth is GTAT FAILED. Its 100% on them.
What a dispecable company they are.
Hard to believe Tim Cook got roped into this FRAUD of a company.
Thats not the important part.
The important part is the CEO should have warned investors that they would NOT have $330M cash at the end of 2014 and $600M in revenue. He literally went from the company is all tract to the company is BANKRUPT in 6 weeks.
Sog, you really don't have a fucking clue what happened behind the scenes, besides the almost non-existant public information we have. How-bout you tone down your hatred, whining, attacks, and slander until we actually find out what went down? You act as if you have it all figured out- have a bit of humility and aknowledge that you don't. You've spammed the board with countless of these nasty comments already. Chill the **** out until there's actually answers, your vitriol is pretty fruitless. Yeah, sucks for yo if you owned GTAT stock. But if you didn't, you haven't been negatively affected by this, and from the looks of it neither has Apple. Stop pretending its the end of the damn world, and pretending you know Cook got "scammed" by a "fraudster".
You have a habit of making assumptions and hyper sensationalizing everything, including how you jumped on "bendgate" with the same kind of incessant whining- while hardly ever making positive comments. Patterns of a troll. Oh, and capitalizing half your words doesn't help your cause, just makes your comments look even more like spam.
Like Natalya Poklonskya in Crimea?
I like how “cute puppet” apparently can apply to both of them. What the Internet won’t cook up… (mildly NSFW)
I don't have to be behind the scenes to know whats going on here.
On August 26th the CEO said the company was on target to have $330M in cash by the end of the year and make $600M in revenue in the 2nd half of the year. He was very upbeat in all his projections and even said earnings would be STRONGER than originally forecasted in Jan2014.
So how do you go from that to BANKRUPT in 5 weeks?
Totally and utterly impossible. The guy was LYING through his teeth on August 26th to avoid a sell off of the stock.
You need to be extremely naive or stupid to think the CEO did not BLANTANTLY LIE and MISLEAD during his August 26th conference call about the state of GTAT.
here is an article you must read to get educated on this FRUAD company
http://seekingalpha.com/article/2546055-did-gt-advanced-technologies-mislead-investors
"The August 26 presentation reiterated some financial data from the Q2 earnings report, such as its $333 million cash balance, and emphasizing GTAT's "strong balance sheet." However, the presentation (page 14) completely misstates GTAT's debt as of Q2. By the end of Q2 GTAT had already received the lion's share of Apple's prepayments, $543 million of the promised $578 million, and its total debt including the prepayment obligation had swollen to $644.8 million, not the $294 million shown in the presentation."
So GTAT management say says on Aug 26 :
1. WE will have $330M in cash by end of year
2. WE have a STRONG BALANCE SHEET (exact words)
3. Debt is only $294 million (when the truth was it was $645M, LIARS!)
And then 5 weeks later they go BANKRUPT! Without any warning at ALL!!! Total FRUAD
So in summation you lost money and are mad about it. First, you were blaming Cook, but now it appears you have pivoted to the no name CEO of GTAT. Here is my question to you? If it turns out that the CEO misrepresented the companies financials, what difference will this make? It is going to get your money back? Will it enable you to prevent a similar situation from happening in the future? No. There are basically two courses of action:
1. Maintain or increase your acceptable level of risk, accept the money is lost and move on to the next opportunity.
Or
2. Lower your level of risk, blame the loss on others and become a more conservative investor.
I also lost money when GTAT filed. I'm not on a witch hunt, I accept bankruptcy is an inherent risk for stock investing (especially in a company no one had even heard of until Apple invested in it). Even so to me the possible reward was well worth the risk, it didn't work out so I'll take my lumps. I also bought 2000 shares after they filed, which historically speaking won't end well. Again to me the potential upside out weights the risk of losing this money.
Bs
the company likely sign nondisclosure agreements with companies like Apple. Apple hardly wants that information released to the public. So the secrecy request is to protect its partners not itself. Why should companies like Apple have to reveal confidential information because one of its partners files bankruptcy?
Sometimes judges will not allow secrecy on these matters. We shall see.
No sense in trying to keep it secret. It will eventually come out. Pretty likely there will be an investor lawsuit over this. It doesn't seem believable that GTAT didn't know about the problem before its August earnings call.
1. WE will have $330M in cash by end of year
2. WE have a STRONG BALANCE SHEET (exact words)
3. Debt is only $294 million (when the truth was it was $645M, LIARS!)
And then 5 weeks later they go BANKRUPT! Without any warning at ALL!!! Total FRUAD
Giving you the benefit of the doubt that you just lost money and are not a troll one more time.
1. This is the outlook if the deal with Apple will go through as planned. Sound like reasonable numbers to me. Of course strongly worded, this is how all are doing it. Like a CV were you always show yourself from the best side. Read such statements as "...if we still exist by the time", if they come from small companies.
Also having X amount of cash does not tell you were it comes from. It's not like he said "we will make 330M profit" (assuming you quoted him literal). I assume that once the Apple contract went through they get an up front payment from Apple to allow them to run the production plant and actually produce stuff for Apple.
And very likely what Apple pays them is less what they would actually charge Apple (there will be a discount in the books that is used to pay off the "debt"). This is the way how Apple gets back the investment. If GTAT would make profit and pays the "loan" back from that profit it would be the worst way to do it and also it would not be a something Apple can calculate with. You cannot compare this to how you balance your credit cards with your pay check. In the business world stuff is more complicated.
2. Of course the balance sheet is strong. They bought equipment with money from Apple and they own it. Read up what a balance sheet is and when it is usually considered strong. If someone says they have a strong balance sheet always be suspicious. From a healthy company you expect it be be strong, so no need to mention it at all. If you need to put an emphasize on it, there's a potential underlying problems. Read such statements as "we have enough assets that can be liquidated, so don't worry about your investment if case of chapter 7".
3. The Apple investment is not booked as debt, because it is an investment for production plant and not a bank loan. Read up now public traded companies need to book stuff. If they book it in any different way, then every start-up in the US would have to file chapter 11 on the day it gets a large investment because they are in too much debt. Such technical differences are very important.
Man, these are absolute business basics. You want to make your company look attractive for investors. So you put a positive spin on everything. If as a CEO/CFO you do not do that, you would be a very bad one. It's about selling your company to investors, not about analyzing the investment value of it from an objective point of view.
You obviously gambled with money on the stock markets you couldn't afford to lose. And you picked a high risk stock for doing that. without hedging your investment at least. The stock had all the warning signs on it to be high risk. And you went Leeroy Jenkis on the stock. Guess, you learned your lesson now. Because you failed doesn't mean that others are frauds.
You are always open to get a lawyer and file a law suit if you suspect any foul play on GTAT. Instead of posting your ramblings here over and over again get at leas a phone consultation with a lawyer.
This concludes our business 101 lesson for today...
PS: The details of the contract will come out. Too many ppl. in a court of law involved that will see the paper. One will leak information for sure for a bit of cash. It's not like everyone working for the legal system earns a ton of cash. Interns are usually willing to share...
No sense in trying to keep it secret. It will eventually come out. Pretty likely there will be an investor lawsuit over this. It doesn't seem believable that GTAT didn't know about the problem before its August earnings call.
Yeah, there will be a law suit here for sure. Will be interesting how it turns out.
I doubt anyone can prove that the filing of chapter 11 was delayed on purpose to get the selling of stocks through. I expect this will be what a law suit will try to do. Only angle I can see.
It will turn out like this "Everything was looking splendid, we had some technical issues but were confident to solve them in a timely fashion. But our attempts failed, even Apple tried to help us a bit. This was unforseen as these emails prove. The problem's root cause was way deeper then we expected. As we invested a lot of our own money to solve the problem. As a consequence, we didn't have enough cash left to meet the contractual requirements for the next payment by Apple scheduled for the end of October. So we ask our other creditors if they could extend our credit line once more so we can secure the Apple investment. Well, they said no. We had no other choice than to file for chapter 11 protection."
And you know what, it sounds plausible to me.
Anyway, we will see more details emerge from leaks in the coming weeks or months.
Yeah but, yeah but...this is AMERICA!! Somebody has to be TO BLAME! How do you think lawyers get rich? "Sh?t Happens"? Nobody can make money from that.
Edit: Spell correct won't underline "id" for "is"? Damn Sigmund Freud anyway!
Edit #2: Just take "Spell correct" as a portmanteau term telescoping "spell check" and "autocorrect"—sort of like "Skid Row" for "Skid Road" + "Cannery Row". Not my day today.