GTAT asks for secret hearing in bankruptcy proceedings

‘Confidentiality obligations’ to a ‘third party’ cited

Even as GT Advanced Technologies entered bankruptcy court Thursday morning in Manchester, it still wanted to keep under wraps much of its $500 million-plus deal with Apple – the reason most observers think the company is filing for reorganization.

The Merrimack-based company, in a move that it admitted was “unusual (and perhaps unprecedented)” is asking for a secret hearing to seal a secret motion because it could face penalties of $50 million per occurrence from a third party – presumably Apple – for violation of a confidentiality agreement with the technology giant.

“To be able to adequately prosecute the relief requested in the motion to seal, GTAT is compelled to discuss in such motion the terms of its confidentiality obligations to a third party. However, even the terms of GTAT’s confidentiality obligations are required to be treated confidentially,” wrote Dan Sklar, GTAT’s bankruptcy attorney in the motion.

In earlier filings, GTAT had promised to explain to the court the reasons behind the bankruptcy filing, but it did not say whether those reasons would be revealed in public.

Apple had promised to advance GTAT $578 million to install furnaces and other gear in its Arizona plant in order to supply Apple with sapphire for its mobile devices. But something went wrong with the deal, and most observers think Apple held on to a $139 million prepayment, which forced the company into bankruptcy. Both parties are mum about what happened.

GTAT has been silent since it first filed for bankruptcy on Monday. Apple, in its first statement Wednesday, in an email to a Reuters reporter, said it was “surprised” by the filing.

"We are focused on preserving jobs in Arizona following GT's surprising decision, and we will continue to work with state and local officials as we consider our next steps,” Apple spokesman Chris Gaither said in the email.