GT Advanced nears deal over Apple secrecy - lawyer

Reuters News
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Posted: Oct 21, 2014 11:33 AM

By Nick Brown

(Reuters) - A lawyer for GT Advanced Technologies Inc, a specialty glass supplier of Apple Inc, told a bankruptcy court on Tuesday the company was close to a settlement with the iPhone maker over access to information.

Scant details have emerged since GT Advanced filed for bankruptcy on Oct. 6, wiping out most of its market value and triggering speculation as to what may have soured its relationship with Apple and torpedoed its prospects.

At a hearing in U.S. Bankruptcy Court in Springfield, Massachusetts, GT Advanced's lawyer, Luc Despins, said he was "optimistic" an agreement would be reached within the next hour or so to resolve disputes with Apple over the disclosure of details in the case.

A near-final draft of that agreement had been filed and the court was due to re-convene on Tuesday afternoon, when GT Advanced hopes to reveal more details of that deal.

The case has drawn the attention of Apple-watchers looking for insight into how the world's most valuable technology company runs its famously secretive production and supply chain, stretching from China to the United States.

But key court filings revealing the reasons for the bankruptcy, which are routine in most Chapter 11 cases, have been filed with the court in secret. GT Advanced has cited strict confidentiality requirements in its Apple contracts which, if violated, carry fines of $50 million.

At the heart of GT Advanced's abrupt bankruptcy filing was a deal struck with Apple in November 2013, under which the iPhone maker helped bankroll a factory in Mesa, Arizona. In return, GT Advanced would have used that plant to make scratch-resistant sapphire glass exclusively for Apple, though the company is now seeking to wind down those operations.

It remains unclear what prompted the bankruptcy filing, but sources and industry experts say GT Advanced was not hitting the required production targets as set out in its original agreement with Apple.

Apple is known to run one of the most efficient supply chain operations in the world but the company is also known for exacting standards and demands that often leave suppliers little room for profitability.

(Additional reporting by Noel Randewich; editing by Tom Brown and G Crosse)