GT Advanced Technologies' decision to file for Chapter 11 bankruptcy protection earlier this week took many by surprise, including Apple.
In its first statement since the Monday filing, Apple said they are focused on preserving jobs in Arizona following GT’s surprising decision and will continue to work with state and local officials as they consider their next steps.
If you recall, Apple partnered with GT last year to build a sapphire manufacturing plant in Arizona. As part of the $578 million deal, Apple agreed to make four pre-payments to GT contingent upon them meeting certain technical goals along the way.
Apple didn’t make the final $139 million payment because GT was unable to meet specific technical requirements according to people familiar with the matter as reported by The Wall Street Journal. It’s unclear if this non-payment is why GT filed for bankruptcy protection but it certainly seems plausible.
Adding a bit of controversy to the mix, GT’s CEO Thomas Gutierrez sold more than 9,000 shares of GT stock on the day before Apple announced its new iPhones last month, netting $160,000 in the process.
GT share value had more than doubled over the course of the past year, fueled by speculation that Apple’s new iPhones would feature sapphire-covered displays supplied by GT. Once it became apparent that Apple was instead using traditional glass, shares dropped 13 percent within 24 hours. On Monday, when GT filed for bankruptcy, shares slid a whopping 93 percent to just 80 cents.
It’s worth pointing out that a filing from GT claims Gutierrez sold the shares as part of a pre-arranged plan that was put in place back in March. What’s more, the executive also sold shares in May, June and July which suggests there was no obvious pattern to his sales.