In May, a fire broke out in one of the factories once used by GT Advanced Technologies (GTAT), an erstwhile supplier of sapphire to Apple that is currently in the throes of Chapter 11 bankruptcy. In July, GTAT reported that damage to its sapphire furnaces housed at the facility “appears highly unlikely” and that the residue on “crystal growing equipment” would have “no likely effect on operability.”
Still, that fire is causing consternation from GTAT’s biggest antagonist in its bankruptcy proceedings—Apple. The smartphone maker told the US Bankruptcy Court of New Hampshire last week that it objected to a financing plan (PDF) from the bankrupt sapphire supplier, saying that details involving GTAT’s insurance company could derail the settlement between Apple and its former Original Equipment Manufacturer (OEM).
Under GTAT’s current financing plan, it must be reimbursed by its insurance company for all of the damage its sapphire furnaces sustained in the fire. If the insurance company stipulates a partial payout for the damages or no payout, or if there is a large deductible, or if parts of the machinery were self-insured by GTAT, then GTAT automatically defaults on its loans to its creditors.
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