GT Advanced Technologies today appeared in a New Hampshire courtroom, asking for non-disclosure in its pending bankruptcy proceedings. According to Reuters, a lawyer for the company told the court that a confidentiality agreement prevented it from disclosing the details surrounding its Chapter 11 bankruptcy.
Luc Despins of Paul Hastings told U.S. Bankruptcy Judge Henry Boroff an unspecified confidentiality agreement prevented GT from disclosing the cause of its bankruptcy, or its plan for dealing with the situation. He also acknowledged the 90 percent drop in the company’s stock price in the first three trading days of this week.
GT further asked the court to seal select documents referencing a third-party, noting that the disclosure would violate existing confidentially agreements. The publication of these documents could prove costly to the sapphire maker with potential damages of $50 million per violation. GT failed to identify the third-party company, but it almost certainly is Apple, which is known for its strict confidentiality clauses.
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GT's lawyers also asked that the proceedings be closed to the public as part of what they agree is an "unusual (and perhaps unprecedented)" request. Lawyers from the Department of Justice denounced GT's motions, saying "the record is insufficient for the court to find what the court needs to find."
GT filed for bankruptcy earlier this week, taking Apple and Wall Street by surprise. Apple reportedly was working with the company to help it remain solvent, but those efforts have failed for the time being and GT will seek to restructure its finances moving forward.
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Top Rated Comments
They got screwed because they couldn't deliver what they contractually promised. If they bet the company on delivering, that's Apple's fault? Apple held a gun to their head and made them sign the contract?
Building contractors must love all you people who don't believe contract terms need to be fulfilled for payments to be made.
If they can't suppress the info, I guess we'll get to see the details. Even if they appear lopsided in favor of Apple, GT SIGNED THE CONTRACT. They could have happily continued on their way without Apple's business.
The CEO cashing out definitely seems fishy and as others have stated, I believe he'll be investigated.
why?
i can´t tell you
got it
Tune in next time on GTRumors...
- "GT Advanced Technologies enters bankruptcy court."
- "GT Advanced Technologies acquired by Apple for pennies on the dollar."
- "Former GT CEO: 'Apple withheld payment in order to bankrupt us and buy us up cheap. I was had!'"
:apple:
You can't buy a new Ferrari with AAPL stock. If you're paid mostly in stock options you're going to have to cash some of them out in order to actually buy stuff and pay your taxes. This is normal activity for the company honchos and it has been going on for years. And they have to file a plan to sell their stocks well ahead of time because they obviously have insider information. Guys at Cue's level are operating under a whole different set of rules than us commoners.
How many shares was he retaining as of the last time they had to disclose? http://finance.yahoo.com/q/mh?s=AAPL+Major+Holders
I'm not saying the GT guy is or is not a crook but if you are inside a company and you can foresee the possibility of your stock going down, you sell. Or you sell to turn paper (stock) into cash as part of harvesting what you've put into your company.
It seems that if Cue is as confident as he is about Apple's Fall prospects, why has HE cashed out of his stock?
Now click into Cook's shares. He's been selling off shares regularly for the last few weeks. Key word "disposition" (look it up if you need to). At the same time, he's been touting "best product pipeline ever". Why is he selling off shares?
Apple is probably not going into bankruptcy court. But if it surprised us all and did, would we not find similar fault with these insider executives cashing out ahead of the event... especially while simultaneously talking "best product pipeline"? Probably not since this is Apple instead of a non-Apple entity. But the point is that selling off shares by executives to personally profit is relatively normal, whether its non-Apple companies or Apple. I wouldn't be so quick to deem this guy "guilty" because he sold shares.
From my perspective, it looks like a small company got throughly locked into a corner by a big company. For whatever reason, the latter decided not to pay some money that small company expected. The small company was completely locked up in terms of exclusivity so if their ONE client did not pay, they could not make up for the lack of payment by selling to anyone else. Thus, boom.
If you shifted the names of the players so the big company was Samsung or Google or Microsoft and the small company was sent into bankruptcy, would be as quick to try & convict the small company as crook, entirely at fault, etc. Or would we at least be able to see the potential of big company socking it to small company and find at least some fault with the former?
Some of us appear to be practically frothing at the idea of Apple stepping in to acquire this little company for pennies on the dollar. If it was Samsung or others would be as excited to see a small company get gobbled up?
Again, not apologizing for GT: all this remarkably negative speculation against them could all prove out to be true. I'd simply offer that we shouldn't convict before we even have the facts. Apple potentially losing a few hundred million dollars is relatively nothing (how much was Beats again?). On the other hand, about a third of that was apparently enough to drive the small company into bankruptcy court.