Apple (NASDAQ:AAPL) fights for secrecy

A company by the name of GT Advanced (NASDAQ: GTAT) is going bankrupt, and this bankruptcy has caused quite a stir, as GT Advanced (NASDAQ: GTAT) provides iPhone screens to Apple (NASDAQ:AAPL). What’s even more interesting is the fact that Apple (NASDAQ:AAPL) is trying its best to keep one part of the $1.5 billion bankruptcy case a secret. However, media companies have sued Apple’s (NASDAQ:AAPL) secrecy efforts.

GT Advanced (NASDAQ: GTAT) sells supplies to make a durable, scratch resistant sapphire. A deal between Apple (NASDAQ:AAPL) and GT Advanced (NASDAQ: GTAT) took place in which the former was contracted to make sapphire screens for Apple’s (NASDAQ:AAPL) iPhone 6. However, Apple (NASDAQ:AAPL) did not end up using the screens, causing GT Advanced (NASDAQ: GTAT) a huge loss. The company had tried to make the sapphire screens as per Apple’s (NASDAQ:AAPL) standards but Apple’s (NASDAQ:AAPL) refusal of using the screens has left the company, that has 1,100 employees and $1.5 billion in assets, out of business. On top of that, according to a contract signed by the two companies, Apple (NASDAQ:AAPL) can fine GT Advanced (NASDAQ: GTAT) $50 million, if the company leaks out any detail of the deal. To make matters worse, two executives also sold their shares before the company could get bankrupt. Obviously GT Advanced (NASDAQ: GTAT) is furious, as reported by Financial Times.

On Wednesday, the GT (NASDAQ: GTAT)’S lawyers argued that the company should be allowed to reveal more information regarding their deal with Apple (NASDAQ:AAPL) for the sake of its creditors and shareholders. Apple (NASDAQ:AAPL), however, has opposed the bankruptcy petition and filed its own motion in New Hampshire federal bankruptcy court.

It has been reported that Apple (NASDAQ:AAPL) was surprised with the news of GT (NASDAQ: GTAT)’s bankruptcy. The company’s bankruptcy was followed by Apple’s (NASDAQ:AAPL) refusal of payment worth $139 million, because the screens made by GT (NASDAQ: GTAT) were not up to mark. It is expected that Apple (NASDAQ:AAPL) will lose the secrecy battle. The Dow Jones Co. of the Wall Street Journal and Bloomberg are also involved in the case, and the judge will be hearing arguments before deciding whether the secrecy should be maintained or not.

Bankruptcies usually become antagonistic or argumentative due to the involvement of angry parties, but they are hardly secretive. Apple’s (NASDAQ:AAPL) efforts of keep the matter secret is what makes it strange as well as intriguing. The bankruptcy court will be looking at the assets that the company is left with, and will pass a judgement on the best methods for dividing this capital amongst the concerned parties.

Why Apple (NASDAQ:AAPL) is so adamant on keeping the matter a secret is not known, as both parties have kept the contract details away from the privy eyes. It remains to be seen whether Apple (NASDAQ:AAPL) will succeed in its bid to maintain the secrecy. However, if GT (NASDAQ: GTAT) wins the case, it will be allowed by law to reveal the details of the contract to the media.