Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
GT Advanced Bankruptcy Takes World By Surprise
Author: Joel R. Glucksman
Date: October 23, 2014
Key Contacts
Back
A high-tech materials manufacturer that may not be familiar to consumers but is well-known by top members of certain industries shocked the world by filing for protection under Chapter 11 of the bankruptcy law on Oct. 6.
In a particularly surprising move, GT Advanced Technologies Inc. argued that it was not able to reveal why it filed for bankruptcy and asked that the court keep its bankruptcy documents sealed, according to Reuters. The company explained that it was “tied up in knots” by a confidentiality agreement, and as a result is also unable to reveal its plan for reorganizing under Chapter 11.
Many commentators are speculating that the confidentiality agreement to which GT Advanced is referring is between it and tech giant Apple. According to the news source, GT Advanced made a deal with Apple last year, under which GT Advanced would provide scratch-resistant synthetic sapphire for Apple’s future mobile devices. Since that time, GT Advanced has been outfitting an Arizona factory to make sapphire exclusively for Apple.
According to The Wall Street Journal, however, Apple was as surprised as anyone by GT Advanced’s decision to declare bankruptcy. Sources told the Journal that Apple had been working with the company to keep it solvent and hadn’t demanded repayment of some loans because of GT Advanced’s weak cash position.
Moreover, last month, Apple announced that it wouldn’t use sapphire screens in its new iPhones after all, according to the Journal. Citing a failure on GT Advanced’s part to meet certain technical milestones, Apple also declined to make a final $139 million prepayment loan.
In August, GT Advanced CEO Thomas Gutierrez told investors that the company was confident that it would receive the final prepayment loan by the end of October, the news source reported. He also said that a failure of this to happen wouldn’t be “a world-ending event,” as the company anticipated cash assets of $400 million by the end of this year.
The world is still here, but GT Advanced’s future remains to be seen.
- Practices: Bankruptcy & Creditors' Rights, Corporate Transactions & Business, Bankruptcy Litigation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Crypto Securities Law: When Tokens Become Investment Contracts
The application of traditional federal securities laws to crypto assets continues to evolve. In some cases, the Securities and Exchange Commission (SEC) considers tokens and other digital assets to be securities. This makes them subject to federal securities law, including the Securities Act of 1933 and the Securities Exchange Act of 1934. This classification has […]
Author: Bryce S. Robins
The Due Diligence Process for NY Condominiums and Cooperatives
While the New York City real estate market can be extremely competitive, moving too quickly often backfires. Before purchasing a condominium or cooperative in New York City, it is important to do you homework. Purchasing property in NYC can involve a dizzying number of legal issues. These include condo and co-op rules, rent restrictions, and […]
Author: Jesse M. Dimitro
Smart Contract Legal Issues: Drafting Agreements for Blockchain
Smart contracts feature a unique blend of legal agreement and technical code. This innovation has the potential to reshape how business is conducted. At the same time, smart contract legal issues around enforceability, jurisdiction, identity, and compliance are common. The legal framework for these self-executing agreements is still evolving. What Are Smart Contracts? Smart contracts, […]
Author: Bryce S. Robins
Are Stay Interviews the Key to Retaining Top Talent?
Retaining top talent continues to be one of the greatest challenges facing employers today. Even in an employer’s market, the loss of a key employee can disrupt operations and result in significant costs. While compensation plays a role, long-term retention often depends on workplace culture, communication, and employee engagement. One increasingly popular strategy for improving […]
Author: Angela A. Turiano
Why Secured Transactions Are Important
Secured transactions form the backbone of a wide range of business dealings, including business loans, mortgages, and inventory financing. Because the stakes are often high and relatively minor oversights can have drastic consequences, lenders and borrowers should thoroughly understand how to form an enforceable security agreement that protects their legal rights. What Is a Secured […]
Author: Dan Brecher
Don’t Cash a “Paid in Full” Check Without Understanding the Legal Implications
Cashing a check marked “paid in full” can be a risky endeavor, particularly if you don’t fully understanding the legal implications. If you are owed more than the amount of the check you accept and deposit, you may waive your right to collect the full disputed amount. That is why you should consider either rejecting […]
Author: Dan Brecher
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.