Creditors involved in the GT Advanced Technologies bankruptcy proceedings are a little happier now that Apple has agreed to take less money from each sapphire furnace sold, and to give the company more rent-free time in the factory it used to make the glass. The company had been contracted to make synthetic sapphire glass for the Apple Watch and iPhone 6, but instead drove itself into a financial crisis.
Apple won't get as much back to keep GTAT bankruptcy settlements on track
Apple agreed to a lower cut from the sapphire furnaces being sold off to pay back debt, and to let GTAT use the factory it's currently in for three extra months without paying rent, according to the Wall Street Journal. Apple owns the factory building and was renting it to GTAT for sapphire glass production.
The two companies struck a deal about a year ago where GTAT agreed to produce the glass Apple wanted for its new iPhone model display surface. As part of the deal, Apple leased factory space to the company, and fronted it over US$430 million to finance the special furnaces it needed for the project.
Most of the glass GTAT produced was too flawed for Apple's needs, and the company suffered from mismanagement. That led to spiraling costs, and ultimately a chapter 11 bankruptcy filing as Apple was unveiling the iPhone 6 and iPhone 6 Plus without sapphire glass displays.
As GTAT's largest creditor in the bankruptcy case, Apple swung a settlement deal with that raised concerns with other creditors over whether or not they'd see any money returned to them. Those concerns raised the possibility of a courtroom fight Apple wasn't interested in dealing with.
In the end, Apple agreed to more concessions to avoid dealing with a drawn out legal process that would likely drag out for years and ultimately leave GTAT completely broke and unable to pay back any of its creditors.
The court overseeing the case has approved the revised settlement agreement, so there won't be any drawn out litigation, and GTAT can start the multi-year process of selling off its equipment and paying back Apple and its other creditors.