After filing for a surprise chapter 11 bankruptcy, GT Advanced Technologies Inc (OTCMKTS:GTATQ) said in a court filing that the company would try to avert any legal battle with Apple Inc. (NASDAQ:AAPL) considering the huge legal cost and resultant fine over the sapphire maker.
The sapphire maker mentioned the damages of up to $1 billion from Apple Inc against the company. According to its recent court filing, GTAT said,
“The alternative to the settlement agreement would be months, if not years, of costly, time-consuming, and distracting litigation with Apple over a wide range of contested issues, the success of which GTAT could not guarantee.”
GT Advanced Technologies Inc (OTCMKTS:GTATQ) further mentioned in the filing,
“Apple has advised GTAT that it would assert liquidated damages claims for in excess of $1 billion against GTAT.”
In addition to it, the sapphire maker sought legal settlement with the iPhone maker to avert “billions of dollars” worth of legal claims in front of a U.S. bankruptcy judge. The company has asked for release from all the Apple claims including liquidating damages, which are likely to exceed $1 billion. GT Advanced Technologies Inc (OTCMKTS:GTATQ) proposed an agreement that “puts all of the disputes between GT Advanced and Apple to rest.”
The agreement is likely to release the company from the exclusivity pacts it signed with Apple Inc. (NASDAQ:AAPL) along with the control of its sapphire-growing patents. In addition to it, the agreement entitles the company to continue the ownership and sales right of the Mesa, Arizona plant for the next four years.
Earlier, Daniel Squiller, COO of GTAT, called the supply agreement with Apple Inc. (NASDAQ:AAPL) “unsustainable” with no scope to redefine the same. Squiller further described the events that lead the company to file for chapter 11 bankruptcy. He further mentioned that GTAT amassed losses to meet the product specifications of the iPhone maker and the company “ended up bearing the costs of more than 1,300 workers, utilities, insurance, repairs and raw materials.” At the end, he endorsed the settlement agreement announced between the two tech companies earlier this week in a U.S. Bankruptcy court.
This article has been written by Prakash Pandey.