GT Advanced Technologies Inc. (NASDAQ:GTAT) Saga

617

By Chris Hillman on November 19, 2014 Company

GT Advanced Technologies Inc. (NASDAQ:GTAT) won an approval by the judge for delaying the settlement hearing with Apple Inc. (NASDAQ:AAPL), a previous partner in business. GT Advanced Technologies Inc. (NASDAQ:GTAT) went broke and its unsecured creditors were requesting postponement for the hearing. The date is now moved to 10 December so that more investigation can be carried out to raise possible objections.

This settlement comes from a deal between Apple Inc. (NASDAQ:AAPL) and GT Advanced Technologies Inc. (NASDAQ:GTAT) that came into existence in the previous year. According to the deal, GT Advanced Technologies Inc. (NASDAQ:GTAT) would make and provide scratch-resistant sapphire glass to Apple Inc. (NASDAQ:AAPL) for its iPhones. Since GT Advanced Technologies Inc. (NASDAQ:GTAT) became bankrupt, Apple Inc. (NASDAQ:AAPL) chose some other company to provide them with sapphire glass. Consequently, GT Advanced Technologies Inc. (NASDAQ:GTAT) filed a case for protection in the Bankruptcy Court of New Hampshire and cited over $1 billion debt.

Charles Powell, the lawyer of creditors’ committee, told Judge Henry Boroff that the committee of the creditors worked very hard to carry out a complete investigation of the case. They want to make sure that the settlement is fair. According to the agreement, all claims between the two companies will be released. Apple Inc. (NASDAQ:AAPL) will get a claim worth $439 million. The claim will be secured by over 2,000 of GT Advanced Technologies Inc. (NASDAQ:GTAT)’s furnaces in Arizona. These furnaces are used to make the sapphire glass.

Those who hold convertible notes and officials at GT Advanced Technologies Inc. (NASDAQ:GTAT) agreed that there should be a delay in the settlement hearing. Till December 3, Judge Boroff has allowed the committee and noteholders to object to the settlement, is any objections are raised.

GT Advanced Technologies Inc. (NASDAQ:GTAT)’s shares increased in the early morning trade today. The company increased by 4.72% and closed at a price of $0.51.

Despite GT Advanced Technologies Inc. (NASDAQ:GTAT)’s bankruptcy, Apple Inc. (NASDAQ:AAPL) said yesterday that they are willing to keep jobs and manufacturing in the area of Mesa, Arizona. The company is committed to using the manufacturing plant again, preserving jobs and working with the locals.

Mesa is struggling to bounce back because the closure of GT Advanced Technologies Inc. (NASDAQ:GTAT) factory has had adverse affects on the area. The factory had employed about 700 people. Apple Inc. (NASDAQ:AAPL) seized the opportunity. They had bought manufactured materials from Asian countries for a long time and are now planning to move manufacturing back into the U.S.

Mesa experienced a housing bust in 2007. This resulted in a loss of about 300,000 jobs. With the arrival of Apple Inc. (NASDAQ:AAPL), the situation of the city changed. It meant that the city is moving towards recovery. A new stadium was built for Chicago Cubs and line for light-rail is also being built.

While GT Advanced Technologies Inc. (NASDAQ:GTAT) and Apple Inc. (NASDAQ:AAPL) await the settlement hearing, Mesa looks to the latter for an improvement in its conditions.