GT Advanced Technologies Inc (OTCMKTS:GTATQ) threw the blame on Apple Inc. (NASDAQ:AAPL) for forcing the sapphire maker to agree to a “one-sided” deal that favored the iPhone maker and pushed the sapphire maker to bankruptcy.
In a sealed court documents that has been ordered to be made public by U.S. Bankruptcy Judge Henry Borrof, GT Advanced Technologies Inc (OTCMKTS:GTATQ) Chief Operating Officer Daniel Squiller hinted that GT Advanced went into bankruptcy because of Apple’ classic “bait and switch strategy”. According to Squiller’s document, Apple Inc. (NASDAQ:AAPL) presented GT Advanced Technologies Inc (OTCMKTS:GTATQ) with an “onerous and massively one-sided deal” covering the iPhone maker’s supply contract with the sapphire maker. Squiller further claimed that when GT Advanced raised concerns regarding the terms of the supply agreement, Apple responded that other suppliers are required to agree with the same terms, and that GT Advanced should just accept the agreement.
According to Squiller, Apple Inc. (NASDAQ:AAPL) offered to buy 2600 sapphire growing furnaces from GT Advanced Technologies Inc (OTCMKTS:GTATQ). After months of negotiations, however, Apple suddenly changed its mind and instead offered to lend GT Advanced the money for building furnaces. GT Advanced then have to grow the sapphires exclusively for Apple, and the iPhone maker will purchase it at a price way lower than its actual market value.
In a separate court filing, Apple Inc. (NASDAQ:AAPL) countered the statements from GT Advanced Technologies Inc (OTCMKTS:GTATQ) as “untrue and defamatory”, claiming that these “are intended to vilify Apple” and make it appear a “coercive bully”. Apple further averred that it offerred GT Advanced “significant concessions”, including a prepayment agreement by which much of the amount of $139 million in balance due would be accelerated in favor of GT Advanced. The iPhone maker also contended that it even committed to risk about $2 billion and work with GT Advanced even when the latter failed to meet deadlines.
Advanced Technologies Inc (OTCMKTS:GTATQ) is being investigated by the Securities and Exchange Commission regarding its company securities trading activity as well as its sapphire business. Shares of GT Advanced recently declined 4% to 56 cents when it availed on October 6 of bankruptcy protection after Apple rejected its sapphire for the iPhone 6. The company said that despite a bankruptcy judge’s order that sealed documents describing its relationship with Apple Inc. (NASDAQ:AAPL) be made public, its bankruptcy settlement with the iPhone maker will still be in effect.
This article has been written by Nonito Guntan.
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