GTAT judge says he’s ready to release sealed document

Even with alleged defamatory opinions of Apple, there’s no reason to keep it secret, he says

Will Apple walk away from a deal to save GT Advanced Technologies, and its remaining 200 jobs in New Hampshire, if a federal judge orders the release of a document containing allegedly defamatory opinions about the technology giant?

Employees, creditors, bondholders and investors are about to find out, after Judge Henry Boroff said in bankruptcy court in Manchester on Thursday that he intended to order the document released early next week.

There is simply no legal reason to keep it from the public, Boroff said while explaining his ruling on a motion by Dow Jones Company, parent company of The Wall Street Journal, to lift the seal.

“I cannot for the life of me see anything other than negative characterizations of the business relationship between two parties,” he said. However, he added, “that doesn’t mean it’s appropriate to remove them from the public record.”

The document, authored by GTAT chief operating officer Dan Squiller, explained why the company’s year-old $578 million deal to supply Apple with sapphire for its mobile devices went sour and led to bankruptcy.

It was included in the reams of motions filed on Oct. 6, when GTAT filed for Chapter 11 reorganization, but it was kept, at Apple’s insistence, under seal.

It would have still been kept under seal – and eventually expunged from the record and destroyed – under an Oct. 21 agreement between Apple and GTAT that would allow the New Hampshire firm to salvage its remaining business and avoid ligation.

Instead, GTAT released a revised version of the Squiller declaration with Apple’s blessing. The revised version, which places the bulk of the blame on Apple, sticks to the facts as Squiller saw them. Left out were about three or four sections in which Squiller gives his opinion of the company that he was doing business with.

“It’s the rhetoric, the name-calling the inflammatory language that is not relevant,” said Apple attorney Bruce Meyers. Such “defamatory” language – included to pressure Apple to come to terms, he surmised – "would hurt the company with its creditors and damage its reputation.”

“We are not arguing that you must keep this under seal because we insist on it in the settlement and the settlement might go away,” said Meyers. “But that might flow from it.”

Boroff was skeptical. Would such a large company “with such a fine reputation like Apple be afraid of being called a name by a supplier?” he asked

Meyers said he took issue with the argument that “just because we are a big company everything rolls off our back.”

But Jeffrey C. Spear, an attorney for Dow Jones, said it was “astonishing that they are going to reign in the reason they want bankrupt” and sought not just the release of that document, but a transcript of a secret hearing when it was first suppressed.

Dow’s motion was backed to some degree by New Hampshire Assistant Attorney General Peter Roth, who said that the parties involved won’t be able to evaluate Apple’s settlement “without looking at the entire picture.”

Also supporting the release were the bankruptcy trustee’s office, which argued that disclosure of court documents was an “essential feature of democracy,” and shareholders, who would need to evaluate the settlement as well as protect evidence in pending lawsuits.

But GTAT, creditors and some bondholders were willing to let Apple have its way. GTAT’s attorney, Luc Despins, asked Boroff to just keep the document under seal until the settlement was approved, which was expected to happen before Thanksgiving.

He argued that “Apple will terminate the settlement if the information comes out there.”

Boroff again expressed doubt. If Apple walked away from the deal, he said, “would that be better public relations for Apple?”

“I don’t have the courage to test that,” responded Despins.

The creditors committee was even more forceful. “If the document is released, a viable option is lost. If it turns to litigation the remaining employees will lose their jobs,” said James Carr, attorney for the official creditors. 

Boroff said at issue is the “integrity” of a law that only allows suppression of court documents in very limited circumstances. Boroff said he was willing to go along with redaction of some price points and quotas in the original Apple deal signed in 2013, because that was clearly covered under that law.

As for the opinions contained in the Squiller declaration, “there is simply nothing sufficiently egregious” nor are they “unusually prejudicial to Apple” to warrant suppressing them.

He said that he intended to “completely unseal” the document next week, adding: “If Apple is disappointed, that’s their issue.”

Categories: GTAT, News