The unsealing of court documents related to the doomed partnership between Apple and sapphire making partner GT Advanced Technologies has unearthed some interesting information to say the least.
In an unedited affidavit, GT Advanced COO Daniel Squiller claimed that Apple used a classic “bait-and-switch” strategy to secure its deal with the now-bankrupt supplier.
“When GTAT’s management expressed obvious concerns to Apple regarding the deal terms during the contract negotiations, Apple responded that similar terms are required for other Apple suppliers and that GTAT should: ‘Put on your big boy pants and accept the agreement’,” wrote Squiller.
The affidavit goes on to reveal just how much control Apple had over partner GT. GT would earn no income at all unless Apple opted to buy any sapphire material in excess of what was required by the loan “repayment” agreement. GT was forced into the role of a ‘captive’ supplier to Apple, bearing all of the risk and all of the cost, including the costs of more than 1,300 temporary and permanent personnel, utilities, insurance, repairs, and raw materials.
“Indeed, the total cost incurred by GTAT pursuant to the project with Apple has so far amounted to approximately $900 million.”
The full-length affidavit filed with the U.S. Bankruptcy Court for the District of New Hampshire is embedded below for your reading enjoyment:
