Apple Objects to GT Advanced's Financing Plan Following Mesa Fire

[macs4nw]

This is such an interesting story. I really wish someone would do an in depth investigative report on it. For a could years there were so many rumor/news stories about how sapphire was going to be the best thing since sliced bread. When Apple contracted with this company the stories talked about how this was such a game change and that Samsung and other phone makers were going to be years behind the curve on sapphire.

Then seemingly over night Apple pulls its contract and GT declares bankrucy. Then stories come out about how the executives of GT dumped their stocks only weeks earlier. Then, after seemingly after all is lost, Apple announces they're going to repurpose the facilities. Now this fire.

I'm not arguing a conspiracy theory, but I feel like there have been so many interesting twists in the story that it really deserves an in depth look at what really happened here.

I do agree that this whole affair does not pass the smell test. And it's definitely leaving somewhat of a bad taste in your mouth. Will we, the public at large, ever find out if there were shady goings-on along the way, what with broken contracts, unfulfilled promises, pre-bankruptcy stock sales by executives, an unexplained fire, and so forth.

The GTAT saga seems to continue on and on.....

 

[ptb42]

Then seemingly over night Apple pulls its contract and GT declares bankrucy. Then stories come out about how the executives of GT dumped their stocks only weeks earlier.

I can't comment about the other allegations, but the stories that GT executives "dumped their stocks only weeks earlier" were just that: stories.

Yes, some of their stock holdings were sold only a few weeks earlier. But, it was a pre-planned sale, initiated as much as a year earlier (although I may be be wrong about the exact duration). In fact, the sales execution was done independently by a broker. This is normal for stock held by an insider (i.e. a company officer).

Unless the SEC can prove the executives were knew that bankruptcy was going to occur at exactly that time, as much as a year in advance, they didn't commit a crime. And it's going to be difficult to prove that, without some sort of "smoking gun" like an email or memo.

 

[Benjamin Frost]

In project management there is a simple formula: quality = resources x time. If you want certain quality you need certain resources and certain amount of time. These people offered a quality, signed a contract to have it delivered at certain time but they didn't have the resources ready. In the world there are people who knows how to sell themselves very well and they are equally talented in making up excuses and pointing fingers when they do not deliver.

I knew this company was not able to deliver once I saw the smile of the owners after signing with Apple, there is this particular facial expression in people who are liars and are there for the money. Apple has been too kind with these people.

I don't know how far Tim Cook was involved with negotiations, but he strikes me as having a certain naivety in some ways, despite his obvious logistics credentials.

Steve Jobs was a better negotiatior, I think. He got the measure of people well, and was wily, in a way that I don't think Cook is.

 

[ProjectManager101]

I don't know how far Tim Cook was involved with negotiations, but he strikes me as having a certain naivety in some ways, despite his obvious logistics credentials.

Steve Jobs was a better negotiatior, I think. He got the measure of people well, and was wily, in a way that I don't think Cook is.

What I would say is that Steve Jobs was an artist and he would move his assets to make the goal happen. he would have been on top of the production himself and pushing the envelope several times a day. Jobs never had a provider who fail on him, actually remember there were no leaks in the development on any Apple product, he was on it as an artist. Tim Cooks ( and is my point of view ) is more a manager who delegates, he is not a creative mind and that is why todays products are based on "features" and not "experiences". Apple had a back up plan regarding the crystals used for the iPhones but... what happened with the liquid metal that Apple had the exclusivity? Tim Cook never used it! Tim Cook is like Obama, he is the manager of the restaurant but not the owner of the franchise. Sorry for over elaborating, just case study at lunch.

 

[Kroo]

In project management there is a simple formula: quality = resources x time. If you want certain quality you need certain resources and certain amount of time. These people offered a quality, signed a contract to have it delivered at certain time but they didn't have the resources ready. In the world there are people who knows how to sell themselves very well and they are equally talented in making up excuses and pointing fingers when they do not deliver.

I knew this company was not able to deliver once I saw the smile of the owners after signing with Apple, there is this particular facial expression in people who are liars and are there for the money. Apple has been too kind with these people.

I think if Steve Jobs were around, he would've installed an Apple specialist to work in the factory and watch what was happening.

Apple had no problems with Corning when they financed the Gorilla glass setup, so we know these partnerships work. It looks more and more suspicious that this company had its eyes on the money and not the product. Other companies don't seem to have the same problems this lot have making sapphire glass, so its clear they were out of their depth from the start and Apple didn't do its due diligence by keeping a close eye when production standards went south.

 

[Robert.Walter]

I think if Steve Jobs were around, he would've installed an Apple specialist to work in the factory and watch what was happening.

Apple had no problems with Corning when they financed the Gorilla glass setup, so we know these partnerships work. It looks more and more suspicious that this company had its eyes on the money and not the product. Other companies don't seem to have the same problems this lot have making sapphire glass, so its clear they were out of their depth from the start and Apple didn't do its due diligence by keeping a close eye when production standards went south.

Did Apple finance Gorilla Glass? I understood SJ convinced Corning to invest in its tech to secure Apple's business.

I'm not sure an Apple specialist would know more about specialty glass manufacture ( this is different than final product specs) than the vendor itself.

Other companies were not making sapphire crystal in the quantities apple was planning on. Making something at one rate is not always up scalable (as GT learned).

OEM's depend on their supply base to be the experts and to be honest about their abilities.

Re the fire, I wonder if there was an element of arson involved because the sapphire ovens are unsellable.

 

[Daalseth]

I can't comment about the other allegations, but the stories that GT executives "dumped their stocks only weeks earlier" were just that: stories.

Yes, some of their stock holdings were sold only a few weeks earlier. But, it was a pre-planned sale, initiated as much as a year earlier (although I may be be wrong about the exact duration). In fact, the sales execution was done independently by a broker. This is normal for stock held by an insider (i.e. a company officer).

Unless the SEC can prove the executives were knew that bankruptcy was going to occur at exactly that time, as much as a year in advance, they didn't commit a crime. And it's going to be difficult to prove that, without some sort of "smoking gun" like an email or memo.

Just because the sale was preprogrammed doesn't mean the executive didn't know how this was going to end up. I have speculated here and elsewhere that they knew they couldn't fulfill the contract when they signed it. The plan from day one was to skim off all they could, dump the stock when it was allowed, and let the company sink when Apple caught on. The only thing that didn't work for them was Apple caught on slightly quicker than they expected. I suspect they were hoping for a few months lag not weeks.

 

[Crzyrio]

What I would say is that Steve Jobs was an artist and he would move his assets to make the goal happen. he would have been on top of the production himself and pushing the envelope several times a day. Jobs never had a provider who fail on him, actually remember there were no leaks in the development on any Apple product, he was on it as an artist. Tim Cooks ( and is my point of view ) is more a manager who delegates, he is not a creative mind and that is why todays products are based on "features" and not "experiences". Apple had a back up plan regarding the crystals used for the iPhones but... what happened with the liquid metal that Apple had the exclusivity? Tim Cook never used it! Tim Cook is like Obama, he is the manager of the restaurant but not the owner of the franchise. Sorry for over elaborating, just case study at lunch.

You can't compare Jobs to Cook. Jobs was CEO at a time when apple was selling a lot less than what they are today. As the company expanded and required giant orders in order to keep up with demand so did the amount of leaks. It is not possible to keep a lid on all of that. If anything Tim Cook is the reason in the past there was such a good lid on supply chain leaks.

Jobs was around when they started dabbing in liquid metal, and that story is yet to play out.

 

[StevieD100]

This story seemingly has no end. 5 years from now, we'll be hearing about how GT has managed to extend the bankruptcy proceedings one more time, by making tens of millions of dollars disappear somehow from the original loan, and trying to re-finance the loan.

GT seem to be following the trail left by SCO who somehow are still trying to get money from IBM despite being financially destitute for years. The Court appointed Administrator has a lot to answer for IMHO.

 

[MH01]

Apple's contract to buy GT's equipment and facilities might be null and void because of the bankruptcy filing.

Say, I have $1,000,000 in debt and I sell my 3 yachts to someone for $500,000. Then I declare bankruptcy. According to the law in the United States, I can't give up my property and then declare bankruptcy - this is fraud. The other debtors want their share of the bankruptcy estate (which the yachts were part of. Any transactions in the prior 2 years are looked into and can all be taken back.

I never knew about the 2 year rule. Does that count for individuals also?

 

[MH01]

This story seemingly has no end. 5 years from now, we'll be hearing about how GT has managed to extend the bankruptcy proceedings one more time, by making tens of millions of dollars disappear somehow from the original loan, and trying to re-finance the loan.

Agreed. Hope MR stops reporting on it honestly!!! Replace it with the next shop/store that implemented apple pay instead

 

[inscrewtable]

I hear you had a fire, when did it happen. Tomorrow.

 

[The Monkey]

The conspiracy theory stuff in this thread is bizarre. A vendor went bankrupt and is having some complications due to a fire. This stuff happens every single day.

Take off the tin foil hats.

 

[C DM]

The conspiracy theory stuff in this thread is bizarre. A vendor went bankrupt and is having some complications due to a fire. This stuff happens every single day.

Take off the tin foil hats.

With early sell off of stock by higher ups in the company and various other "coincidences" being ignored. Not that bizarre.

 

[The Monkey]

With early sell off of stock by higher ups in the company and various other "coincidences" being ignored. Not that bizarre.

No. This stuff happens all the time. And coincidences are just that--coincidences. **** happens all the time. I guess people are bored? Just don't have experience with big corporate stuff?

 

[C DM]

No. This stuff happens all the time. And coincidences are just that--coincidences. **** happens all the time. I guess people are bored? Just don't have experience with big corporate stuff?

Or sometimes there can actually be more to things. Happens plenty in life as well (there's even an expression "sometimes truth is stranger than fiction" that goes along with that). Not enough experience with real life?

 

[skinned66]

This all sounds oppressive and burdensome.

 

[unplugme71]

Not a chance. Surely Apple knows they're incredibly high-profile, and any downright criminal action on their part would have devastating consequences. I know it's popular to attribute violent malice to the very rich (individuals or corporations), but such memes are absurd as there's too much to lose over too little gain, even if that gain is huge by mundane standards. Apple just wanted a leading-edge sapphire factory, and is just trying to make the best of a failed situation thru normal hard bargaining.

lol, like the other dozens of high profile companies/individuals haven't done illegal things. Let's be real, rich or poor, people do messed up things because of greed. "Apple" may not like it, but Apple is made up of humans who are greedy by nature.

 

[unplugme71]

It's too costly to Apple to produce in the US so it makes sense to intentionally bankrupt the company, take the intellectual property and have China produce it for Apple for much less.

I can agree with this.

 

[djgamble]

Apple's contract to buy GT's equipment and facilities might be null and void because of the bankruptcy filing.

Say, I have $1,000,000 in debt and I sell my 3 yachts to someone for $500,000. Then I declare bankruptcy. According to the law in the United States, I can't give up my property and then declare bankruptcy - this is fraud. The other debtors want their share of the bankruptcy estate (which the yachts were part of. Any transactions in the prior 2 years are looked into and can all be taken back.

I'm an Aussie so have NFI how it works in the states.

However, what you're saying sounds semi-consistent with our system. We call is 'insolvency' though (in Australia, 'bankruptcy' refers to personal assets, so a company cannot be bankrupt, only insolvent).

Anyway under our system an administrator would be appointed for an insolvent company and they'd take control over the assets (partially) to make sure the directors of the company don't strip it (e.g. sell what they can to Apple and do a runner).

If the administrator chooses to wind up the company then secured creditors will get their gear first (i.e. the banks will most likely get the highly expensive sapphire-making gear). Selling to Apple? Dooooodgy!! The administrator runs the company now, not the ex-directors. The old directors can't just make priority payments or under the table deals. The administrator might be able to sell the gear if we're talking unsecured assets... however, that would be at market rate to the open market (not cheaply to Apple in order to secure a contract with Apple or some rubbish like that).

PS - I don't think it's like selling 3 yachts to somebody. It's like selling 3 yachts to a company.

---

I understand that company law is very different in the USA so don't think for a second that this is exactly how it would play out in the USA (I've never studied company law in the USA and don't even live there). Just giving a comparison for a bit of fun... our company law is largely based on the USA's model (because they had big companies before us) so IMO some parts might be similar.

 

[A.Goldberg]

The conspiracy theory stuff in this thread is bizarre. A vendor went bankrupt and is having some complications due to a fire. This stuff happens every single day.

Take off the tin foil hats.

I'm not sure where to stand on this one, but it just seems like one sketchy move after the next. Corporate fraud and grey-area deals happen every day too. I thought this company was done, I guess not.

lol, like the other dozens of high profile companies/individuals haven't done illegal things. Let's be real, rich or poor, people do messed up things because of greed. "Apple" may not like it, but Apple is made up of humans who are greedy by nature.

You're absolutely right. I don't expect apple, the worlds 13th largest economy, worth 700B+ is too concerned about greedily saving a few million here and there. I could be wrong, but there's no substantial track record of this.

 

[Daalseth]

No. This stuff happens all the time. And coincidences are just that--coincidences. **** happens all the time. I guess people are bored? Just don't have experience with big corporate stuff?

"Big corporate stuff" meaning the people at the top doing everything they can to screw everyone involved over in order to line their own pockets? Oh yeah, I've seen this kind of thing a lot going back to when I was in high school in the '70s.

 

[Flight Plan]

What the actual? This is like a bad gangster movie or something.

All that's missing is the creative use of a horse head...

 

[uid15]

smh this company... I can't even believe how shady they are and how poor of decisions they seem to make.

I can't believe "how poor of" a sense of grammar you have.

 

[bbeagle]

I never knew about the 2 year rule. Does that count for individuals also?

It's more of a thing lawyers would know.

http://www.nolo.com/legal-encyclopedia/selling-nonexempt-property-before-filing-bankruptcy.html

It can be as short as 60 days, as many as 10 years. A lawyer friend of mine said it's complicated, and it depends on the value of the assets sold vs. how much debt the person or company is absolving.

He told me for an average income person filing bankruptcy in Chapter 7 or 13, they look for anything more than $600 in the past 60 days. And anything more than $10,000 in the past 2 years. It might be legitimate, they just have to look into it.

For example, he said that if I sold my old car worth $5,000 to a car dealer as down-payment to buy a new car, and still had the new car, it's reasonable. If I gave away my coin collection worth $2,000 to my brother - that's NOT okay.