Earlier this week, GT Advanced Technologies Inc., creators of Sapphire screens, abruptly filed for bankruptcy, taking investors, creditors, and partner Apple by complete surprise. The company had made a scheduled bond payment and promised those interested in another business update later in the week. Apple had been working with the company to help keep them afloat and had even stopped demanding repayment of loans due to GT’s low funds. Regardless of their obvious struggles, the GT executives were still confident that they would end 2014 with $400 million in the bank.
Last month, Apple declared that, despite their willingness to help, they would not be using Sapphire screens on their phones as expected. Originally, Apple had hoped that the screens would be an answer to a common smartphone problem: cracked and scratched screens. But the use of the Sapphire screens was broken off in favor of another brand.
Apple also refused to make the last $139 million loan prepayment due to GT not making the advancements outlined in previous meetings. GT had expected Apple to make the payment at the end of October.
During the bankruptcy filing, the makers of Sapphire screens gave out few details on their predicament, and CEO Daniel W. Squiller said that the company was in the midst of a “severe liquidity crisis due to circumstances that will be more fully described.”
Regardless of these claims, the filing for chapter 11 bankruptcy with a bankruptcy lawyer is unusual because the company was not obviously on the edge of failing. It also made the scheduled payment, when most companies seeking bankruptcy status ask for an extension from investors, or the payment is delinquent entirely.
More information is expected to come out now that GT has recently gone before Judge Henry J. Boroff with their bankruptcy lawyer for their first hearing on the matter.