Simples....
All they have to do is give Apple one or all of the sapphire glass plants in exchange for the debt writedown. Should be fair since they built it to supply Apple, right?
GT Advanced Technologies, the struggling materials firm that was once tapped to provide durable sapphire glass for Apple, says it will cut staff and close its sapphire manufacturing plants as it moves toward bankruptcy protection. In documents filed with the New Hampshire bankruptcy court on Friday, GT said the "cash burn" at …
Agreed, but this looks worse for GT than it does for Apple.
Remember GT signed off on those "oppressive and burdensome terms and obligations". Even if they were "oppressive and burdensome", the time to complain is BEFORE you sign.
@John Tserkezis - English and American law have the concept of the "unconscionable contract" - a contract with terms that are so one-sided and unfair to the relatively weaker party that they are unenforceable because no reasonable person would otherwise agree to them.
In England it is referred to as "inequality of bargaining power", and courts won't enforce such contracts because they are considered exploitative of the relatively weaker party.
You could imagine that if you are a small specialty glass supplier worth a few million bucks, and Apple comes along and dangles a billion dollar opportunity under your nose, it's quite possible you would feel compelled to agree to any terms they offer, no matter how unconscionable or exploitative they actually are. If such is the case, GT can request relief from the court, probably including payment of sums of money that the court finds that GT reasonably relied on under the legal doctrine of promissory estoppel, otherwise known as "detrimental reliance".
Anyway - there's a lot of case law that says GT may come away with a bunch of money if they can prove certain facts about the contract.
I can't comment with any confidence on the American position but in the UK simple "inequality of bargaining power" is not a reason to set aside the terms of a contract. There are high standards of protection in business to consumer sales in the UK but for b2b contracts it's not quite the case of "you agreed to it, your bound by it" but it's pretty close, the law doesn't protect you simply because it was dumb to agree to something. This said, the position in UK law and possibly the position in the USA is that if any of the clauses about breach amount to a "penalty clause" (where the penalty is so big it's just designed to scare you and isn't a reasonable pre-estimate of loss) then they would be unenforceable - but that's about the clause not about the relative strength of the parties.
"I'm glad we've got people like you, innovating and keeping technology moving forward."
Agreed, what a luddite. If Apple had just gone with the crowd and used boring and predictable alternatives like Gorilla glass, we wouldn't have innovative new technologies like bendy glass. <Cough>
OK, OK, I'm going. Mine's the one with the very big, loose pockets...
It may interest you to learn that GT Advanced owns a device called the Hyperion Ion Cannon that can be used to create very thin slices of sapphire for laminating to stronger glass, something outlined in an Apple patent.
You can read all about this in a Tech Crunch article – http://techcrunch.com/2013/11/11/apple-fires-its-ion-cannons/
I smashed my Seiko watch screen while on holiday. Turns out it used sapphire glass. Replacement for the screen (plus other bits) was £100. So it's not indestructable - even on a small screen. It would clearly be more prone to cracking on a larger screen and any replacement would probably be much more expensive and difficult to fit.
"I don't believe sapphire can't work anyway, it's more brittle. Only suitable for small screens. This is the reason no-one is doing it."
The big panes of glass covering the optics and laser designator in this picture...
http://www.lockheedmartin.com/us/products/Sniper.html
...are slabs of artificial sapphire about the size and thickness of a complete iPad. The only time I've seen a pane broken in service was when the nose shroud of a Sniper pod was returned from Britain for repair. The UK didn't explain, but the steel casing was scoured like it had been dragged over pavement; the paint was scorched; and the interior was packed with mud and fire retardant that had entered through the one broken pane (of 4 on the pod). The popular conclusion was "a belly landing or crash that dragged the pod down the runway under a rather distressed aircraft that was later sprayed with firefighting foam."
The Sniper pod is not the only military application of large sapphire panes (nor are its panes the largest in service). After Desert Storm showed that all those fancy 1980s smart weapon optics were sandblasted into translucency by the Middle East's sand, the US military (and others, I'm sure) worked to find harder optical material. Sapphire was one, while SiAlON was another. It took about a decade to bring those to maturity and they began entering service in the early 2000s. There was an expensive learning curve.
Of course, there's a huge difference between a military customer who is willing to pay for an 80% rejection rate to have get good sapphire panels for a small amount of kit, and a consumer goods manufacturer who wants millions of sapphire panels each year for a few dollars each.
There's a WSJ story where they say that the sale was pre-planned back in March. In fact, the CEO has been regularly selling stock at the start of the month. Seeing as his company's stock had doubled in 12 months, it seems a sensible investment strategy to sell some off.
Is that GT was previously a manufacturer of the machines to make the sapphire boules and then to cut them. Good machines too.
Then they said we've got this next generation of machines that are much better. So, let's go into business producing sapphire, not just the machines to make sapphire. So they do and they sign up with Apple.
And it turns out that the new machines aren't quite as good as they thought they were. Oh Dear.
Have I told you that my office is in the building of a sapphire producer?
...and whether sapphire glass is the future or not...
But one thing is sure: the only people who will benefit now from this story are the lawyers.
At times like this, it must be good to be a lawyer. The longer the fighting, the pain and the trouble lasts, the greater your fee, the bigger your house, the most expensive your new suit and the diamond ring for the wife.
Technology? Shmecknology! <corny cash register sound>