In Bankruptcy, GT Advanced Attempts to Expose Apple’s Disclosure Requirements
GT Advanced Technologies, the company that was to supply Apple with scratch-resistant sapphire, is attempting to expose some of the details of its Chapter 11 bankruptcy filing. Originally, the company wanted to seal certain documents or file them in redacted forms. The information GT Advanced now seeks to release would allegedly describe the partnership with Apple and how the company collapsed, likely shifting a portion of the blame away from GT.
The company contributes the change of heart to wanting to ensure an open, transparent and fair process in the Chapter 11 claims. Most major institutions, such as Apple, typically try to keep business operations confidential, which may create logistical problems in a Chapter 11 setting. According to representatives of GT Advanced, the agreement with Apple was excessively burdensome and the company should be released of the agreements, as it was costing GT Advanced approximately $1 million per day.
The secrecy was due to potential penalties of $50 million for each violation of the confidentiality agreement. According to court papers, the agreement stated that GT Advanced could only disclose details to the extent required by law. To avoid incurring these penalties, the company requested that the court order the company to file non-redacted versions of the documents. If the court does not grant the motion, the company will alternatively file the non-redacted versions of the documents under a court seal of secrecy.
Attorneys for GT Advanced argued that the strict confidentiality agreement with Apple would put other creditors at a disadvantage during the Chapter 11 proceedings, as Apple would be the only party to have the complete picture and a disproportionate amount of control over the case.
If your company is considering bankruptcy as an option and you’re concerned about how it might impact previously signed agreements with partners and clients, meet with an experienced Los Angeles bankruptcy lawyer.