Creditors who are backing GT Advanced Technologies have recently pushed back an approval date for the company’s settlement with Apple, stating that an investigation will determine whether GTAT was given the short end of the stick on the agreement. Reuters reports that GTAT noteholders including Aristeia Capital and Sumitomo asked for and received an extension to the approval deadline set for a proposed settlement with Apple.

For those of you who didn’t know, this has become an issue all because of recent news of GTAT filing for Chapter 11 bankruptcy protection back in October after having signed a $578 million contract to provide the Cupertino California company with sapphire material last November. Apple ended up buying land and developing a sapphire manufacturing facility in Mesa, Arizona as a result of the partnership and even paid GTAT $439 million over the past year, only withholding the last $139 million payment after the sapphire firm failed to deliver on contractual production goals. Apple claims that another $700 million was spent on infrastructure and other costs associated with the project as well.

For its part, GTAT ended up stating that Apple’s terms were unsustainable, characterizing the deal as “oppressive and burdensome.” GTAT ended up agreeing to sell off more than 2,000 sapphire furnaces to pay off its $439 million debt to Apple.

US Bankruptcy Judge Henry Boroff, who was originally scheduled to oversee a settlement hearing but creditors filed motions asking for more time. The argument specifically cited legal claims from GTAT COO Daniel Squiller who accused Apple of pulling a “bait-and-switch” deal which was largely favorable to the Cupertino California company. Creditors are also alleging that Apple breached its contract with GTAT, adding that claims on GTAT equipment may potentially be unsecured. The publication claims that this would place Apple at the back of the pack when GTAT starts paying out outstanding debt.

As of right now, Judge Boroff agreed to the extension and rescheduled the settlement hearing to December 10. During this time, noteholders are requesting that Apple and GTAT provide documents and records to carry out their investigation.

We’ll have to wait and see what happens.

Source: Reuters