Court documents unsealed on Friday reveal the extent of Merrimack, New Hampshire-based sapphire glass manufacturer GT Advanced Technologies' strained relationship with Apple in the lead-up to its bankruptcy filing in October. Both companies fought to keep those documents from the public, but the judge overseeing the bankruptcy proceedings decided against it, according to Re/Code.
“With a classic bait-and-switch strategy, Apple presented GTAT with an onerous and massively one-sided deal in the fall of 2013,” GT Advanced COO Daniel W. Squiller said in an affidavit. “The deal with Apple was viewed as a potential game-changer for GTAT.”
Apple was counting on using sapphire display materials extensively throughout its product line until its relationship with GTAT fell apart.
Squiller claimed in the original deal Apple would own sapphire manufacturing furnaces and GT Advanced would operate them. But he alleges that the deal was later changed, where GT Advanced would borrow money from Apple to purchase and assemble the furnaces, shifting the financial burden entirely to GT Advanced.
Apple purportedly had no responsibility in the deal to purchase any sapphire while preventing GT Advanced from doing business with other companies, according to Squiller’s affidavit. And he described the deal as “unsustainable without Apple taking responsibility for costs overruns.”
In Apple’s request to seal Squiller’s affidavit, it claimed it did as much as possible to accommodate GT Advanced, despite GT Advanced’s alleged inability to meet “performance goals.”
“Contrary to the picture painted by the Debtors in the Supplemental Declaration, Apple has bent over backwards to work with the Debtors, including making payments to the company notwithstanding the company's failure to meet performance milestones, in the hope of obtaining usable, economically viable sapphire from the Debtors,” Apple said.
The two parties reached an agreement in late October to end their business agreement, weeks after the bankruptcy proceedings began. But that isn’t the end of GT Advanced’s legal issues. The Securities and Exchange Commission is also investigating trading activity surrounding the company that occurred as early as Jan. 1, 2013, according to regulatory filings. GT Advanced said it is cooperating with the SEC’s request.
Read the court filings below: