GT says confidentiality pact rules out bankruptcy explanation
(Reuters) - Apple Inc AAPL.O supplier GT Advanced Technologies Inc GTAT.O argued on Thursday it could not reveal why it filed for bankruptcy and asked a court to keep crucial documents sealed, a highly unusual move that may keep investors in the dark about its unexpected financial implosion.
The company, which had been slated to provide Apple with scratch-resistant sapphire for future mobile devices, told the U.S. Bankruptcy Court it was barred from disclosures because it was "tied up in knots" by a confidentiality agreement.
At the first public hearing since GT Advanced's unexpected Monday bankruptcy filing, a lawyer for the company said the agreement also prevented it from revealing its Chapter 11 game plan.
GT Advanced forged a deal last year with Apple that involved outfitting an Arizona factory to make sapphire exclusively for the iPhone maker. Apple, which zealously guards the secrecy of its product pipeline, has been known in general to place strict confidentiality requirements on its many suppliers.
Thursday's request underscores the highly unusual nature of the case, starting with GT Advanced’s bankruptcy filing which caught everyone from Wall Street investors to Apple itself off guard.
Lawyer Luc Despins of Paul Hastings told U.S. Bankruptcy Judge Henry Boroff an unspecified confidentiality agreement prevented GT Advanced from disclosing the cause of its bankruptcy, or its turnaround plan. He also acknowledged the 90 percent drop in the company’s stock price in the first three trading days of this week.
“I want to convey to all shareholders and creditors that the company feels terrible about that loss of value and will work every day to recover that value,” he said.
“That’s an aspirational statement, not a guarantee.”
The judge ended the two-hour public hearing by retreating to his chambers for a private meeting with GT Advanced and lawyers for Apple and the U.S. Trustee, a Department of Justice official who acts as a watchdog in bankruptcy cases. Continued...