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Apple is objecting to bankrupt GT Advanced Technologies’ financing plan, saying the terms of the $95 million loan agreement would undermine a settlement the iPhone maker reached with its former sapphire crystal supplier last year.
The Cupertino technology giant said it generally supports GT’s plans to obtain financing to help it reorganize under the supervision of the U.S. Bankruptcy Court. However, it takes issue with certain provisions of the loan that are tied to a May fire at Apple’s Arizona facility.
According to the court filing, GT Advanced Technologies must collect enough money from the insurance company to repair any damage to the furnaces used to grow the sapphire crystals. If it fails to do so, GT will be in default.
Apple writes that GT has already indicated damage appears to be minimal — and that these terms would give lenders too much leverage to foreclose on the furnaces if the insurance company refuses to pay an amount deemed sufficient to make repairs.
Under these loan terms, Apple asserts its former supplier will be placed in the difficult position of choosing “between defaulting on the [loan agreement] or the Apple Settlement Agreement.” That settlement dealt with the companies’ differences over a failed effort to manufacture durable, scratch-resistant smartphone screen material.
A group of GT Advanced’s shareholders also have raised objections, questioning why the company needs to raise money nine months into its bankruptcy.
The New Hampshire company filed for bankruptcy last October, a year after announcing a lucrative deal with Apple that it was unable to fulfill. The company’s financial crisis provided a rare glimpse into Apple’s dealings with its suppliers.
This article originally appeared on Recode.net.