The judge adjudicating the bankruptcy case of GTAT, Henry Boroff exposed the supposedly “defamatory” information, contained in the original version of Squiller’s Affidavit, to the general public. In what has become the most heated court case of 2014, Friday’s hearing summoned by Judge Boroff asked GTAT to specify the portions which were cut out of its original bankruptcy filing.
GTAT filed for bankruptcy in October of this year after its multi-million dollar contract with Apple Inc. to provide Sapphire for lenses as well as screens on Apple Inc. (NASDAQ:AAPL) devices, didn’t work out.
Originally, the bankruptcy filing, filed by GTAT’s Chief Operating Officer Daniel Squiller, contained remarks and statements about Apple Inc. that the latter deemed “defamatory and irrelevant” and asked to be removed. However, Judge Boroff asserted in a recent court hearing that such statements were necessary to be revealed to get clearer picture of the case, and ordered Squiller to re-file his 21-paged testimony including the “defamatory” statements.
The order came days after Apple Inc. and GTAT had signed a deal to settle GTAT’s debts by waiving off some amount it owes to Apple Inc.
However, now that all the dirt has been spilled, including information deemed confidential by Apple Inc. GTAT and Apple Inc.’s bailout agreement stands void. Apple Inc. in its original contract with GTAT, had also specified a fine of $50 million in case of leaked confidential information, which is exactly why the original bankruptcy filing was done under seal to avoid violations of this clause. If the information that has been leaked by Friday’s hearing been by GTAT itself, Apple Inc. would have had legal grounds to sue GTAT for over $1 billion in damages.
However, as the information was released publicly by a court judge himself, Apple Inc. has no choice but to withstand the defaming of its public image. According to Apple Inc. the statements released “are intended to vilify Apple and portray Apple as a coercive bully”. In its press filing, Apple Inc. said that due to disclosure of such information, “Apple’s image and reputation will be harmed”.
Following are some points from Appendix A-1 which Apple Inc. has found to be “defamatory”.
- At the time GTAT entered into agreement with Apple Inc. to supply sapphire technology to the latter, it had no clue that it was a ‘heads I win, tails you lose’ situation.
- “With a classic bait-and-switch strategy, Apple presented GTAT with an onerous and massively one-side deal.”
- The collaboration was not mutually inclusive, and “Apple simply dictated the terms and conditions” which GTAT had to follow.
- GTAT showed concern expressing that Apple’s stringent demands could not be accomplished within the given resources. In reply, Apple Inc. said other suppliers were fulfilling their duties amid similar conditions and advised GTAT to “Put on [its] big boy pants and accept the agreement.”
Apple Inc. (NASDAQ:AAPL) has denied all these accusations made in the bankruptcy filing by GTAT. Apple Inc. claims it “bent over backwards” trying to get GTAT to work as a supplier by providing the latter with loans even though the company could not meet any milestones in terms of performance.