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

[tbrinkma]

...
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!!
...

Apple *was* a secured creditor (the largest debt owed by GTA, IIRC). Apple had loaned GTA a sizeable amount of money contingent upon actual, to-spec sapphire production. The sapphire-making gear going to Apple isn't 'Dooooodgy', it's how the debt to Apple is being repaid.

 

[bbeagle]

Apple *was* a secured creditor (the largest debt owed by GTA, IIRC). Apple had loaned GTA a sizeable amount of money contingent upon actual, to-spec sapphire production. The sapphire-making gear going to Apple isn't 'Dooooodgy', it's how the debt to Apple is being repaid.

I agree with you, but also with djgamble....

In a bankruptcy proceeding, all of the assets are liquidated and given to each secured creditor as to percentages owed.

For example, say GTA filed bankruptcy with $1,000,000 in assets that were liquidated.

If Apple is owed $5,000,000, (making up names here - Intel owed $2,000,000, Microsoft owed $2,000,000 and Samsung owed $1,000,000)....

Apple would get 50% of the money - $500,000 - Intel and Microsoft would each get 20% of the money - $200,000 each, and Samsung would get $100,000 - 10% of the money....

Now, if Apple made a deal to get MORE than $500,000 from taking the sapphire-making gear, GTA would be liable for doing something illegal. Apple would therefore have to give it back, and get only $500,000.

(It's much more complex, but I'm trying to show in layman's terms what is basically done)

Apple never did anything wrong - GTA did. Apple is allowed to try to settle debts, just like a debt collector. But once it goes to Bankruptcy, there are new rules for the 'old' legal things done. And Apple can get hurt in the process.

 

[tbrinkma]

I agree with you, but also with djgamble....

In a bankruptcy proceeding, all of the assets are liquidated and given to each secured creditor as to percentages owed.

For example, say GTA filed bankruptcy with $1,000,000 in assets that were liquidated.

If Apple is owed $5,000,000, (making up names here - Intel owed $2,000,000, Microsoft owed $2,000,000 and Samsung owed $1,000,000)....

Apple would get 50% of the money - $500,000 - Intel and Microsoft would each get 20% of the money - $200,000 each, and Samsung would get $100,000 - 10% of the money....

Now, if Apple made a deal to get MORE than $500,000 from taking the sapphire-making gear, GTA would be liable for doing something illegal. Apple would therefore have to give it back, and get only $500,000.

(It's much more complex, but I'm trying to show in layman's terms what is basically done)

Apple never did anything wrong - GTA did. Apple is allowed to try to settle debts, just like a debt collector. But once it goes to Bankruptcy, there are new rules for the 'old' legal things done. And Apple can get hurt in the process.

All of which ignores that the sapphire furnace transfer was *approved by the bankruptcy court* as the method by which Apple would be made whole. When the court approves the method by which a creditor will be paid back, that's how the creditor gets paid back.

GTA appears (with the loan terms in question) to be attempting set things up in order to 'give away' some of what Apple is owed in exchange for the new loan.

 

[Thunderhawks]

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

Not everybody who visits this forum is an American or speaks/writes in perfect English.
Also, typing something in haste with autofill and autocorrect makes for some funny sentences/grammar.

 

[djgamble]

Apple *was* a secured creditor (the largest debt owed by GTA, IIRC). Apple had loaned GTA a sizeable amount of money contingent upon actual, to-spec sapphire production. The sapphire-making gear going to Apple isn't 'Dooooodgy', it's how the debt to Apple is being repaid.

Possibly one of the secured creditors yes... however, GT and Apple wouldn't decide the order of priority or what goes to who, the administrator would. Priority payments to creditors are completely doooodgy.