According to Reuters, 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, something we most seriously doubt as GTAT was merely a barely arms-length sub of Apple, and it is something that happened in the supply chain that caused GTAT to declare lights out.
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.
That said the company is very, very sorry:
“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.
Clearly, the secrecy surrounding the case is precisely why there is suddenly so much interest surrounding it: just what are GTAT, and by implication Apple, hiding?
Despins said at the close of the hearing the sealing request was complex. “It’s like a Russian doll. You open the first one and there are four more in there.”
Ann Marie Dirsa, a lawyer from the Office of the U.S. Trustee, criticized the lack of disclosure by GT Advanced. “The record is insufficient for the court to find what the court needs to find.”
It may be insufficient but not even as US bankruptcy trustee appears willing to enforce the US bankruptcy code when the potential adversary is none other than the world’s biggest and most powerful company.
By early afternoon, it was unclear what action Boroff had taken on the sealing motion, which GT Advanced said was needed due to a confidentiality agreement with unidentified party. GT Advanced acknowledged the request might be unprecedented but said it risked damages of $50 million per violation of the agreement.
The company will return to court on Oct. 21 to ask the court to make permanent many of the orders that were entered on a temporary basis on Thursday.
And while the general public, or the doughnut-receiving shareholders have no clue what just happened, Apple is already scheming how to obtain the company for pennies on the dollar in the upcoming stalking horse auction:
Industry insiders and Wall Street analysts have been left to speculate. Their musings centered on GT’s half-billion dollar deal with the iPhone maker, under which Apple helped bankroll a manufacturing plant in Mesa, Arizona, on the condition that GT hit certain operational targets.