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Sapphire supplier's creditors want Apple exec to spill secrets

Gregg Keizer | Dec. 3, 2014
GT Advanced Technologies' creditors and bondholders want to depose Apple COO, but Cupertino won't produce him, allege attorneys

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Credit: iStockphoto

Creditors and bondholders of Apple's erstwhile sapphire supplier today asked a federal judge to force Apple's COO to answer questions about the bankruptcy of GT Advanced Technologies.

In a motion filed yesterday, GT's official committee of unsecured creditors and a group that holds millions in bonds issued by the firm pressed U.S. Bankruptcy Judge Henry Boroff to demand that Apple produce Jeffrey Williams, the company's chief operations officer, for a half-day of questions regarding the deals Apple struck with GT.

Apple has rebuffed requests to make Williams available, the committee's and bondholders' lawyers claimed.

"The noteholders and the committee tried to work with Apple's counsel to make a short deposition as convenient as possible for Williams," the motion stated (download PDF). "This motion is necessary because Apple has refused to produce Williams for any deposition under any circumstances."

The committee and bondholders want Williams under oath so their attorneys can get more information on how Apple and GT negotiated their $578 million deal in 2013 and the settlement the two companies signed in October.

That settlement awaits court approval.

"Based on documents produced by Apple, it is clear that Williams played an important, substantial and hands-on role in managing the relationship between GTAT and Apple," the motion read. "The documents also make clear that Williams ... will be able to provide deposition testimony that no other Apple witness can provide."

The Apple-GT settlement will sever most ties between the companies by terminating all contracts. Apple will be allowed to recoup the $439 million it had already given GT as the latter sells sapphire-growing furnaces over the next four years.

The settlement is critical to the creditors and bondholders because it will put Apple first in line in getting money from the GT bankruptcy, and would prevent GT from suing Apple for a variety of claims, including breach of contract, as well as pushing for a reduced repayment of the millions Apple loaned it.

According to the creditors committee and noteholders, Apple will probably argue that Williams' time is too valuable to waste on a deposition. "Apple is trying to shield Williams," said the motion, which went on to cast Apple's COO as the point for the firm's dealings with GT.

An earlier deposition scheduled for Nov. 24 was postponed at Apple's request, said the committee's and bondholders' lawyers. Later, "Apple declined to produce Williams for a deposition of any length under any circumstances," they alleged.

GT was to crank out sapphire for Apple to use as a replacement for the glass atop iPhone touchscreens. But the New Hampshire firm imploded this summer and filed for Chapter 11 protection in early October.

 

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