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GT Advanced: Confidentiality Pact Bars It From Explaining Bankruptcy Filing

The iPhone maker has been known in general to place strict confidentiality requirements on its many suppliers.

Apple

Apple Inc supplier GT Advanced Technologies Inc told a U.S. court it was barred from disclosing why it filed for bankruptcy, saying the company was “tied up in knots” by a confidentiality agreement.

A lawyer for the company told the court on Thursday it could not reveal its bankruptcy game-plan as a result.

GT Advanced has a deal with Apple that involves outfitting an Arizona factory to make scratch-resistant sapphire glass exclusively for the iPhone maker. The iPhone maker, which zealously guards the secrecy of its product pipeline, has been known in general to place strict confidentiality requirements on its many suppliers.

Apple said on Wednesday that it was surprised with the bankruptcy filing and that it was working with Arizona officials on its next moves.

GT Advanced has offered little explanation for its surprise bankruptcy filing, which led to its stock falling more than 90 percent on Monday, wiping out nearly all of its $1.5 billion market worth.

Earlier on Thursday, GT Advanced had asked the bankruptcy court to keep under seal some key documents relating to a third party, saying this would allow it to avoid paying damages under confidentiality agreements.

It did not disclose the identity of the third party nor the nature of the potential contract violations.

In a filing with a U.S. bankruptcy court in New Hampshire early on Thursday, the company also asked that the hearing to deal with this request be held “in camera,” or closed to the public.

“GTAT recognizes the unusual (and perhaps unprecedented) nature of the request made in this Motion,” the company said in the filing.

GT Advanced said it was compelled to make the request to avoid the risk of paying damages of $50 million per violation.

The case is In re: GT Advanced Technologies Inc, U.S. Bankruptcy Court, District of New Hampshire, No: 14-11916.

(Reporting by Tanya Agrawal and Tom Hals; Editing by Ted Kerr, Robin Paxton and W Simon)

This article originally appeared on Recode.net.

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