GT Advanced to enter settlement with Apple allowing $439 million claim

By Kali Hays

New York, Dec. 17 – GT Advanced Technologies Inc. obtained court approval of its settlement agreement with Apple Inc., according to a Wednesday order from the U.S. Bankruptcy Court for the District of New Hampshire.

As previously reported, the settlement releases GT from all exclusivity obligations under its various agreements with Apple and allows GT to retain ownership of all production, ancillary and inventory assets located in Mesa, Ariz.

The company said it will exit from the market as a producer of sapphire materials and will refocus its business as an equipment supplier, manufacturing and developing sapphire growth systems and processes.

Under the settlement, Apple will have a mechanism for recovering its $439 million pre-payment made to GT over a period of up to four years without interest, solely from a portion of the proceeds from ASF technology sales.

The full amount will be considered an allowed claim under any Chapter 11 plan filed by GT.

Upon the effective date of a plan, Apple will have an administrative expense claim in any amount that has not been paid and the Apple security interest will be a perfected security interest. Both the claim and interest will be junior only to claims or liens securing priming financing, according to the order.

If after four years GT is still in bankruptcy, Apple will have the option to file a failure to pay complaint with the court, which could lead to the foreclosure of GT property.

The agreement also provides for a mutual release of any and all claims by both parties.

As a result of the agreement, GT said it will retain control of its intellectual property and will be able to sell its sapphire growth and fabrication technology, including ASF and Hyperion, without restrictions.

In addition, GT and Apple will continue their technical exchange involving the development of processes for growing next generation sapphire boules as GT continues to build on its ASF115Kg technology and expand its range.

Merrimack, N.H.-based GT Advanced Technologies is a provider of equipment and services that support the growth of the solar and LED industries. The company filed for bankruptcy on Oct. 6 under Chapter 11 case number 14-11916.

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