What might sound like a good news for GT Advanced Technologies Inc (OTCMKTS:GTATQ) bondholders with rising investment value could be a complete disaster for the company as bond holders are enticed to withdraw investments upon prospects of gain. A favorable decision for the sapphire-maker in a case against Apple Inc. (NASDAQ:AAPL) is likely to trigger some bond selling.
According to Joe Sarachek, CRT Capital Group LLC, is hoping an increase in value of GT Advanced Technologies Inc (OTCMKTS:GTATQ)’s lower-ranking debt with current value of 45 cents against a dollar. Sarachek is expecting a rise in debt value if Apple Inc. (NASDAQ:AAPL) is to give up some of its $469 million in settlements along with reverse transaction of $56 million, which the sapphire-maker paid to trade creditors before declaring bankruptcy.
Litigation experts are also stating that the $56 million paid to trade creditors might be credited back to the company for its bondholders as per the bankruptcy law.
Earlier, a group of unsecured creditors filed objection against the settlement with Apple Inc (NASDAQ:AAPL) claiming that the iPhone maker didn’t provide sufficient information to the creditor committee before making the investments. The committee is claiming losses of up to $1 billion for GT Advanced Technologies Inc (OTCMKTS:GTATQ) after the failure of Arizona plant and other deals.
Steve Grill, one of the attorneys for the committee, said, “It is left to the committee to try to determine which party is responsible for the failure of a billion-dollar project touted as a game-changer for the debtors and whether a full release of Apple is in the best interest of the debtors’ estates and general unsecured creditors.”
In the mean while, the shares of GT Advanced Technologies Inc (OTCMKTS:GTATQ) are trading at 0.225 along with current market cap of $35.39 million.
This article has been written by Prakash Pandey.