Apple, Inc., the iconic company responsible for satisfying our national addiction to iPads and iPhones, may well find itself spending time in Bankruptcy Court. GT Advanced Technologies Inc., a supplier of sapphire crystal glass that is expected to be utilized in Apple’s upcoming watch device, filed for Chapter 11 bankruptcy protection on October 6, 2014.
Chapter 11 bankruptcy is utilized most often by businesses seeking to reorganize its business structure by trimming down and consolidating debt. Unlike going out of business and utilizing Chapter 7 bankruptcy to liquidate assets and pay creditors, Chapter 11 is a way for companies to continue operating their business while at the same time securing breathing space to restructure debt.
At the time of filing, GT’s spokesman Tom Gutierrez stated “[T]oday’s filing does not mean we are going out of business; rather, it provides us with the opportunity to continue to execute our business plan on a stronger footing, maintain operations of our diversified business, and improve our balance sheet.”
Apple had sunk $578 million dollars into the company to obtain the synthetic sapphire crystal glass. According to later reports, it appears the Chapter 11 filing may have resulted in a falling out between the two companies and the existence of a $350 million dollar loan furnished by Apple to GT.
According to Bloomberg.com, GT and Apple have requested approval from the bankruptcy court of a settlement that will effectively dismantle the relationship between the two companies and allow GT to move forward manufacturing the furnaces which produce the desired sapphire crystal glass. Interestingly, the settlement agreement has been submitted to the bankruptcy court with a request to keep secret the terms of the settlement.
If you are considering a filing for bankruptcy relief and wish to consult with a qualified bankruptcy attorney about your options, please contact one of our locations nearest you in Alabama, Mississippi or Tennessee for a free, confidential consultation.