GT Seeks to Void 'Oppressive and Burdensome' Agreements With Apple, Outlines Sapphire Wind Down Process

gt_sapphire_furnaceYesterday, lawyers for Apple's bankrupt sapphire production partner GT Advanced Technologies notified the court that the company would be seeking to "wind down" operations at its sapphire production facilities in Arizona and Massachusetts, while also pursuing efforts to escape from contracts related to those operations.

In a pair of filings today, GT has followed through on those plans, with one filing asking for court approval to void its contracts related to the operation, calling the terms of its contracts with Apple "oppressive and burdensome."

As discussed in detail in the Supplemental First Day Declaration, the agreements imposed oppressive and burdensome terms and obligations on GTAT. The contracts and leases...provide no benefit to GTAT's estates, and GTAT's continued performance under the Agreements is no longer a viable business option. [...]

GTAT has determined that the Agreements are no longer necessary for GTAT's business operations. The Agreements also are not a source of potential value for GTAT's future operations, creditors, or interest holders and constitute an unnecessary drain on GTAT's resources.

GT believes it will be able to pursue further claims against Apple, but is unable to do so at this stage of the Chapter 11 bankruptcy proceedings, and so has asked that the agreements be voided while maintaining its right to pursue future claims against Apple related to the agreements.

GT's second filing addresses the wind down procedure for its sapphire production facilities, noting that sapphire boules currently being grown in furnaces are valued at roughly $20,000 each and take up to 30 days to grow, and thus it is in the interest of the company and its creditors to allow boules already being grown to be completed.

[M]erely "pulling the plug" is not a viable option given the significant value of GTAT's equipment at these facilities (most notably, the sapphire growing furnaces) as well as the significant value of the sapphire boules that are currently being grown in the furnaces (a process that can take up to 30 days). For these reasons, GTAT has developed the Wind Down Process, which will allow GTAT to wind down its sapphire manufacturing operations in as orderly a manner as possible while preserving the value of its assets.

The first stage of GT's Wind Down Process involves maintaining a crew of 75 employees to monitor ongoing sapphire growth and then remove the boules and prepare them for sale, a process expected to be completed by mid-November. The second stage, requiring 15 employees, involves the cleaning and decommissioning of the furnaces themselves to preserve their value. Finally, roughly 35 employees will be needed to "shut down and clean up" the Arizona facility, with final closure coming by December 31.

Overall, GT projects that 890 employees will lose their jobs with the shutdown, with the company seeking approval to spend approximately $65,000 in incentives to ensure certain qualified employees remain with the company during the wind down process.

Apple has not commented publicly on the matter beyond its initial statement expressing surprise at GT's bankruptcy filing and pledging to work to preserve jobs in the area.

(Image: GT sapphire furnace)

Top Rated Comments

(View all)
Avatar
79 months ago

Apple is a bully and arrogant. They're like the guy yelling at the gate agent at an airport, "Do you know who I am?!"
Like businesses should kiss their feet because it's a big contract.


What??

GT signed a BUSINESS contract with Apple. Apple has no obligation or "moral" reason not to hold them to their agreement. How is Apple being a bully? They loaned GT half a billion dollars, and since this story broke, Apple has said that at this time, they are not looking for the repayment of their loan. So where does "bully" and "arrogant" come in?
Score: 74 Votes (Like | Disagree)
Avatar
79 months ago
if it was so "burdensome & oppressive" to be a supplier for Apple, outside of going into an agreement with Apple in the first place, why would the CEO take almost $160K of stock value out of the company if its agreement with Apple created no value?
Score: 63 Votes (Like | Disagree)
Avatar
79 months ago
Didn't they agree for these terms when they signed up to get half a billion dollars from Apple? They are just using bankruptcy to get away from keeping their part of the deal. It's could be a setback for bringing back hi tech manufacturing to US.
Score: 53 Votes (Like | Disagree)
Avatar
79 months ago
You signed the deal, suck it up and deal with it.
Score: 52 Votes (Like | Disagree)
Avatar
79 months ago
Safari is snap-

Oh, sorry, wrong thread.
Score: 50 Votes (Like | Disagree)
Avatar
79 months ago
Funny how they were willing to sign those "Oppressive and Burdensome" agreements when they involved a bunch of money coming to them, but now that they're no longer "benefitting GTAT's estates", they want them voided...

Clint
Score: 46 Votes (Like | Disagree)

Top Stories

Early iPhone 12 Tests Show Ceramic Shield is Stronger and More Scratch Resistant Than iPhone 11 Glass

Friday October 23, 2020 1:21 pm PDT by
Apple's new iPhone 12 models are protected by a Ceramic Shield cover glass that has nano-ceramic crystals infused right into the glass to improve durability. According to Apple, Ceramic Shield offers four times better drop protection than the glass used for the iPhone 11 models. YouTube channel MobileReviewsEh conducted some tests on the iPhone 12 using a force meter to compare its performance ...

First Impressions From New iPhone 12 and 12 Pro Owners

Thursday October 22, 2020 4:20 pm PDT by
It's already Friday, October 23, in Australia and New Zealand, which means some customers who purchased an iPhone 12 or 12 Pro already have their new devices in hand. We've seen dozens of reviews of the iPhone 12 and iPhone 12 Pro from media sites, but now first impressions from regular Apple customers are available. Image via MacRumors reader Boardiesboi New iPhone 12 and 12 Pro owners are...

iPhone 12 Pro Allows You to Measure Someone's Height Instantly Using LiDAR Scanner

Saturday October 24, 2020 11:12 am PDT by
iPhone 12 Pro models feature a new LiDAR Scanner for enhanced augmented reality experiences, but the sensor also enables another unique feature: the ability to measure a person's height instantly using the Measure app. You can even measure the seated height of a person in a chair, according to Apple. When the Measure app detects a person in the viewfinder, it automatically measures their...

Apple VP Kaiann Drance Interview Addresses Battery Life, MagSafe, and Power Adapter Concerns

Friday October 23, 2020 3:37 am PDT by
Apple's Vice President of iPhone Marketing, Kaiann Drance, has provided a new interview to Rich DeMuro on the Rich on Tech Podcast, to discuss the iPhone 12 and iPhone 12 Pro. Although much of the interview repeated points from Apple's "Hi, Speed" event, there were a number of interesting tidbits regarding the affect of 5G on battery life, MagSafe concerns, and the lack of a power adapter in...

iPhone 11 Pro Outlasts iPhone 12 and 12 Pro in Extensive Battery Life Test

Friday October 23, 2020 8:36 am PDT by
Arun Maini today shared a new side-by-side iPhone battery life video test on his YouTube channel Mrwhosetheboss, timing how long the new iPhone 12 and iPhone 12 Pro models last on a single charge compared to older models, with equal brightness, settings, battery health, and usage. All of the devices are running iOS 14 without a SIM card inserted. In the test, the iPhone 11 Pro outlasted both ...

Apple Distributing New Heated Display Removal Machine for iPhone 12 Repairs

Thursday October 22, 2020 6:20 pm PDT by
Apple is providing Genius Bars and Apple Authorized Service Providers with a new heated display removal fixture for iPhone 12 and iPhone 12 Pro repairs, according to information obtained by MacRumors from a reliable source. To open iPhone 12 models, technicians will be required to slide the device into a specialized tray, and then place the tray into the high-temperature fixture for two...

Apple Warns MagSafe Charger Can Leave Circular Imprints on Leather Cases

Friday October 23, 2020 3:23 pm PDT by
If you keep your iPhone in a leather case while charging with Apple's new MagSafe Charger, the case might show circular imprints from contact with the accessory, according to a new Apple support document published today. Apple's leather cases for the iPhone 12 and iPhone 12 Pro are not available until November 6, but a MacRumors reader has already shared a photo of a circular imprint on...

MagSafe Charger Teardown Reveals Simple Design With Magnets and Charging Coil Encircling a Small Circuit Board

Friday October 23, 2020 7:50 am PDT by
iFixit has today shared a teardown of Apple's new MagSafe charger for the iPhone 12 and iPhone 12 Pro. An X-ray of the MagSafe charger courtesy of Creative Electron reveals the internal charging coil surrounded by a circular arrangement of magnets within the puck. The only seam that iFixit was able to leverage to open the device was where the white rubber circle meets the metal rim,...

PSA: Non-iPhone 12 Models Charge Super Slowly With MagSafe Charger

Friday October 23, 2020 4:11 pm PDT by
Alongside the iPhone 12 models, Apple introduced a new $39 MagSafe Charger that's meant to work with the magnets in the iPhone 12 Pro models to charge them up at a maximum of 15W. The MagSafe Charger is technically able to be used with older iPhones, but it's not a good idea because the charging with non-iPhone 12 devices is so slow. We did two tests with the iPhone XS Max, draining the...

New Photos Offer Better Look at iPhone 12 Color Options

Tuesday October 20, 2020 2:34 am PDT by
As we wait for the iPhone 12 review embargo to lift later today, more pictures are circulating of the devices in real-world lighting conditions, providing a better look at the different colors available. Leaker DuanRui has shared images on Twitter of the iPhone 12 in white, black, blue, green, and (PRODUCT)RED. The black and white colors are similar to the iPhone 11 colors, but the other...