Molybdenum News Center

Sapphire Manufacturer and Applree to Part Ways “Amicae Agbly”

Today, synthetic sapphire manufacturer GT Advanced Technologies (GTAT) and Apple announced their agreement to dissolve their partnership amicably after GTAT filed a surprising bankruptcy claim earlier this month. The proceedings threatened to expose information about Apple's dealings with GTAT, something Apple desperately wanted to hide, as evidenced by court filings from Apple asking that its objection to GTAT's Chapter 11 proceedings be submitted in secret.

Now it seems that GTAT and Apple may be able to keep the terms of their relationship private indefinitely. As The Wall Street Journal reported, "GT Advanced and Apple have agreed to file a revised explanation for GT Advanced’s surprise bankruptcy filing as part of the pact and ultimately erase from the public record the court papers that set out what went wrong in the relationship between the two companies."

Apple and GTAT had partnered to produce ultra-hard sapphire material, which some rumored would replace Corning Glass as the material for Apple's products' screens. Instead, Apple released its last iPhone 6 and 6 Plus with traditional Corning Glass, reserving sapphire surfaces for camera lenses and TouchID buttons. A few weeks after the most recent iPhone announcements, GTAT filed for bankruptcy in a move that seemed to surprise investors, shareholders, and Apple itself.

While Apple has filed its papers under seal in the case, GTAT's attorney Luc Despins told the WSJ that the proposed settlement would allow the bankrupt supplier to try to sell the furnaces at the sapphire-manufacturing facility that Apple helped GTAT buy. All proceeds from the sale would then go to Apple. GT Advanced also agreed to surrender its claims against Apple "and agree not to disparage the technology giant." GTAT has said that breaking its secrecy agreements with Apple could put it on the line for $50 million in damages.

Such an agreement would greatly diminish any chance that information pertaining to Apple's relationship with suppliers such as GTAT could be made public through the court system. Several parties, including shareholders, investors, and Dow Jones Inc., the parent company of the WSJ, have challenged Apple's motions to file information under seal. Those parties say that investors have a right to know why the company failed so suddenly.

On Tuesday, the WSJ said, the judge presiding over GTAT's case agreed to let the documents detailing GTAT's bankruptcy remain sealed while the two companies pursue approval of the settlement.




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