Last week, Apple supplier GT Advanced Technologies Inc filed for bankruptcy in a move that shocked even Apple, which had planned to depend on GT Advanced for scratch-resistant sapphire screen technology for all future Apple devices.
According to the Wall Street Journal, GT Advanced’s bankruptcy filing was met with shock from its investors, creditors and partners alike — even Apple itself remarked that the filing was “a surprising decision” in a statement.
The bankruptcy comes as such a shock due to the fact that GT Advanced made a bond payment and promised a business update just a week before the bankruptcy was filed. In August, GT Advanced executives stated they predicted the company would have $400 million in the bank at the end of the year.
Even more bizarre is the fact that GT Advanced refuses to disclose the reasons behind its bankruptcy, citing a confidentiality agreement that also bars its executives from discussing how it plans to move forward with its Chapter 11 bankruptcy, Reuters reports.
“Bankruptcy court, especially Chapter 11 practice, is unlike other legal proceedings. They do not make television dramas about business reorganizations in the bankruptcy court,” says Charles Huber, Principal of a law office. “The bankruptcy judge has almost absolute control of the proceedings, and if he or she believes there is a good reason for keeping elements of the case secret, that is what is going to happen.”
It may be likely that Apple’s decision to not use GT Advanced’s sapphire screens for this year’s batch of new iPhones may have contributed to the company’s financial woes; the Wall Street Journal reports that Apple also refused to pay GT Advanced $139 million in prepayment loans that GT Advanced had expected to receive by the end of this month.
The reasons behind GT Advanced’s bankruptcy may reveal themselves during the company’s upcoming Chapter 11 bankruptcy hearings — but don’t expect to be using a smartphone with a sapphire screen anytime soon.