More secrets could come from GT Advanced bankruptcy as Apple divulges details to creditors

Posted:
in General Discussion edited November 2014
Secret documents being shared by Apple with creditors of former sapphire partner GT Advanced Technologies could become a matter of public record next month, as part of the ongoing bankruptcy proceedings.




Though the information being shared by Apple remains out of the public eye, the creditors could decide to use some of it to challenge the bankruptcy ruling. In that event, it's likely that the details would not be kept secret by the judge overseeing the case, The Wall Street Journal reported on Tuesday.

"I don't want to get into the sealing business again if I don't have to," Judge Henry Boroff said in court, making it clear that more of Apple's secrets could come out as a result of the bankruptcy hearing.

Apple initially fought to keep a number of documents secret in the case, but ultimately conceded and agreed to unseal a number of secret documents in order to comply with the bankruptcy settlement.

The secret documents revealed the terms of Apple's extensive non-disclosure agreements with suppliers. For example, suppliers are prohibited from mentioning Apple by name during their daily operations, and the project itself is given a code-name.

Apple suppliers are also required to lock down their operations with a qualified security team, 24/7 security cameras, sensors, a personal identification credential screening, and vehicle markings. Suppliers must also agree to be audited by Apple at any time, providing access to information systems, facilities, and personnel that work for the company.

Creditors are currently reviewing the documents provided to them by Apple ahead of a December court date. In the event that creditors believe the terms of the bankruptcy agreement are not in their favor, they could present some of Apple's confidential documents as evidence to bolster their case.

The creditors have already alleged that Apple breached its contract with GT Advanced Technologies. GTAT noteholders including Aristeia Capital and Sumitomo asked for and received an extension earlier this month, pushing back the approval date for the settlement with Apple.

Following its bankruptcy filing in October, GT Advanced has said its arrangement with Apple was a "classic bait-and-switch" deal that favored the Cupertino, Calif., company. For its part, Apple said it "bent over backwards" to help the supplier, which failed to deliver sufficient quantities of scratch-resistant sapphire material as was agreed upon.

Comments

  • Reply 1 of 18
    "Bait and switch"? It's more like "cracked boules."
  • Reply 2 of 18
    gtbuzzgtbuzz Posts: 129member
    Almost every deal has 2 sides - while I would not go so far as to say a winner & a loser, I would say that each side thinks their side is favored to come out ahead. Otherwise, they would still be negotiating the contract. This is a simplistic view, but GTAT needs to calm down and take their medicine. If this gets out of hand and the courts divulge Apple secrets, the Apple Stockholders will also be the losers. You can expect Apple and others to become even more secretive in the future - I know I would.
  • Reply 3 of 18
    ecatsecats Posts: 272member
    I'd expect that the creditors to GT Advanced would try to squeeze this as much as possible. After all they seemingly made a bad investment in GT Advanced. However it's becoming clear that GT Advanced also misrepresented the maturity of their technology and abilities.
  • Reply 4 of 18
    rogifanrogifan Posts: 10,669member
    Anyone know who at Apple was the DRI for the GT relationship?
  • Reply 5 of 18

    The National Equirer will reveal that Apple has access to alien technology.

  • Reply 6 of 18
    Quote:
    Originally Posted by ECats View Post



    However it's becoming clear that GT Advanced also misrepresented the maturity of their technology and abilities.

    I worked for a small company selling sapphire screen protectors for iPhone 5/5s and iPhone 4/4s. We were buying them directly from GT Advanced and our orders were small (less than 100 at a time). I have a hard time imagining a company that did that kind of business would be mature enough to supply sapphire screens for Apple.

  • Reply 7 of 18
    The way I see it, many people -and companies- are trying to just destroy Apple. Some for the money, some just because they hate the Apple hype. Any company that can manage that the government obligates Apple to share it's secrets is going to be accomplishing something no other company has accomplished in years. Think about it. Secrecy is a very strong business strategy that Apple has, and that many other companies still haven't add to their business model. How is it that even when we partially know what products Apple will come up with, they still surprise us with their announcements, almost always? Secrecy. If the customer doesn't know EXACTLY what's coming, the surprise is way more emotional, which leads to a buying decision.

    Remember what happened when Apple shared it's secrets -prototypes- with Microsoft? Where did Apple go after that? Eventually to the very bottom. So in my opinion (and mine don't have to be everyone's opinion) the race is on (by companies like GT Advanced). Whoever cracks Apple's secrecy will gain a huge business and technology advantage. Think of what can happen! Other companies can start asking the government to ask companies like Apple stop the way they do many business procedures, contracts with other companies, etc. Eventually making it difficult for companies like Apple to stay focused on manufacturing and innovating, cause they'll eventually be super busy defending themselves in court against almost every technology company in the world that wants a piece of the action. The verdict of this case can change history more than the verdict from the Apple vs Samsung case.

    So what's my point? That it is very very sad and disappointing to see companies like GT Advanced behaving like little children. Showing everyone that they way they act is: "I will win by destroying others". Instead of: "I will just try to give the best service possible and will try to make the best product possible".

    Embarrassing, these are supposed to be mature adults managing these companies. Don't they have any shame? Oh! And as always, the ones that really lose are the employees. Embarrassing.... just embarrassing.
  • Reply 8 of 18
    "Bait and switch"? It's more like "cracked boules."

    Yep. It's a bunch of boule-sh*t.
  • Reply 9 of 18
    mpantonempantone Posts: 1,354member
    Quote:

    Originally Posted by Rogifan View Post



    Anyone know who at Apple was the DRI for the GT relationship?

    What does it matter? Ultimately, the responsibility of the partnership would be fall on someone at the senior VP level or higher.

     

    In fact, because Apple loaned GT Advanced $439 million, the buck really stops with CEO Tim Cook. He's the only one who could authorize such a sum.

  • Reply 10 of 18
    melgrossmelgross Posts: 31,471member
    "Bait and switch"? It's more like "cracked boules."

    Yes, it seems as though the entire problem was that they couldn't produce what they promised to produce. Everything else falls in comparison.
  • Reply 11 of 18
    mpantone wrote: »
    What does it matter? Ultimately, the responsibility of the partnership would be fall on someone at the senior VP level or higher.

    In fact, because Apple loaned GT Advanced $439 million, the buck really stops with CEO Tim Cook. He's the only one who could authorize such a sum.

    Tim only authorizes purchases of one billion dollars or higher, otherwise the VP's have discretion to throw around a few hundred million when they want. ;)
  • Reply 12 of 18
    melgrossmelgross Posts: 31,471member
    rogifan wrote: »
    Anyone know who at Apple was the DRI for the GT relationship?

    It isn't relevant.
  • Reply 13 of 18
    MacProMacPro Posts: 18,142member
    gtbuzz wrote: »
    Almost every deal has 2 sides - while I would not go so far as to say a winner & a loser, I would say that each side thinks their side is favored to come out ahead. Otherwise, they would still be negotiating the contract. This is a simplistic view, but GTAT needs to calm down and take their medicine. If this gets out of hand and the courts divulge Apple secrets, the Apple Stockholders will also be the losers. You can expect Apple and others to become even more secretive in the future - I know I would.

    I still want to know how the GTAT board payed themselves millions just before filing is legal.
  • Reply 14 of 18
    Quote:

    Originally Posted by Rogifan View Post



    Anyone know who at Apple was the DRI for the GT relationship?

    That's on the QT :)

  • Reply 15 of 18
    Just leave them alone. GTAT is a bunch of cheaters.
  • Reply 16 of 18
    wigbywigby Posts: 688member
    rumpels wrote: »

    So what's my point? That it is very very sad and disappointing to see companies like GT Advanced behaving like little children. Showing everyone that they way they act is: "I will win by destroying others". Instead of: "I will just try to give the best service possible and will try to make the best product possible".

    Embarrassing, these are supposed to be mature adults managing these companies. Don't they have any shame? Oh! And as always, the ones that really lose are the employees. Embarrassing.... just embarrassing.

    GT Advanced isn't trying to destroy anyone. It's more like they're drowning and pulling down anyone close enough to them to stay afloat. It's not in their interests to force Apple to reveal any secrets. It's in their interests to not go completely into debt and become a piraya in the tech industry.
  • Reply 17 of 18
    Nobody forced GTAT to sign anything. They agreed to the deal, took the money and produced crap. If these creditors want a war, Apple will destroy them
  • Reply 18 of 18
    The actual "bait and switch" was accomplished by the GTA (!) leadership who, having no previous expertise in Sapphire boule production, entered into agreement with Apple with the apparently sole intention of offloading their company shares at a profit, filing for bankruptcy to absolve themselves of any obligation to produce what they couldn't deliver in the first place, and riding off into the sunset with bags of cash, in the process giving the much-respected American manufacturing industry a very bad name indeed.
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