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
Dissolving Your Business: Essential Legal Steps to Protect Your Interests
If you’re considering closing your business, it’s crucial to understand that simply shutting your doors does not end your legal obligations. Unless you formally dissolve your business, it continues to exist in the eyes of the law—leaving you exposed to ongoing liabilities such as taxes, compliance violations, and potential lawsuits. Dissolving a business can seem […]
Author: Christopher D. Warren
The Role of Corporate Restructuring in Mergers & Acquisitions
Contrary to what many people think, corporate restructuring isn’t all doom and gloom. Revamping a company’s organizational structure, corporate hierarchy, or operations procedures can help keep your business competitive. This is particularly true during challenging times. Corporate restructuring plays a critical role in modern business strategy. It helps companies adapt quickly to market changes. Following […]
Author: Dan Brecher
Crypto Enforcement: A Former Prosecutor’s Warning to Criminals and the Public
Cryptocurrency intimidates most people. The reason is straightforward. People fear what they do not understand. When confusion sets in, the common reaction is either to ignore the subject entirely or to mistrust it. For years, that is exactly how most of the public and even many in law enforcement treated cryptocurrency. However, such apprehension changed […]
Author: Bryce S. Robins
Understanding Chattel Paper: A Key Component in Secured Transactions
Using chattel paper to obtain a security interest in personal property is a powerful tool. It can ensure lenders have a legal claim on collateral ranging from inventory to intellectual property. To reduce risk and protect your legal rights, businesses and lenders should understand the legal framework. This framework governs the creation, sale, and enforcement […]
Author: Dan Brecher
Crypto Compliance: A Comprehensive Guide
For years, digital assets operated in a legal gray area, a frontier where innovation outpaced the reach of regulators and law enforcement. In this early “Wild West” phase of finance, crypto startups thrived under minimal oversight. That era, however, is coming to an end. The importance of crypto compliance has become paramount as cryptocurrency has […]
Author: Bryce S. Robins
Supreme Court and Title VII: Implications for Reverse Discrimination
Earlier this month, the U.S. Supreme Court issued a decision in Ames v. Ohio Department of Youth Services vitiating the so-called “background circumstances” test required by half of federal circuit courts.1 The background circumstances test required majority group plaintiffs pleading discrimination under Title VII of the Civil Rights Act to meet a heightened pleading standard […]
Author: Matthew F. Mimnaugh
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.