GT Advanced Technologies Inc (NASDAQ:GTAT) said it will cut 890 jobs, close an Arizona plant expected to make scratch-resistant screens for Apple Inc, and suggested it could pursue legal claims against the iPhone maker while revamping under bankruptcy.
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"Only if GT winds down these operations will it be able to stop its mounting losses and re-focus its resources on the operation of its core business of selling sapphire furnaces and other products," the company said in a court filing on Friday.
GT Advanced said it was burning through $1 million a day at the operations it intended to close.
"GT believes that it has many claims against Apple arising out of its business relationship with Apple," the company said in a filing with the U.S. Bankruptcy Court in Manchester, New Hampshire.
The company said it could not pursue the unspecified claims at the outset of its bankruptcy, but that the claims would allow GT Advanced to terminate several Apple agreements that it said were burdensome and of no value.
Apple responded to requests for comment by pointing to its earlier statement that it remains committed to preserving jobs in Arizona and was consulting with state and local officials on its next steps.
GT Advanced stunned investors on Monday by filing for Chapter 11 bankruptcy with little warning, sending its shares plummeting 90 percent to below $1.
Adding to the shock, the company has provided only scant details of the cause of its bankruptcy and its turnaround plans.
The company said in Friday's court filing it needed to wind down operations in Mesa, Arizona and Salem, Massachusetts as soon as possible to preserve its dwindling cash. The company said the process would take until the end of the year.
GT Advanced reached an agreement with Apple last year to transform itself from a supplier of sapphire furnaces to a manufacturer of sapphire for Apple. The iPad maker provided $578 million in funding for the Arizona plant, and GT Advanced agreed to repay the money over five years, starting in 2015.
The first sign of trouble came in September when Apple indicated its iPhone 6 would use rival Gorilla Glass, rather than protect its screens with sapphire material.
GT Advanced asked the bankruptcy court to end 13 contracts with Apple, including a confidentiality agreement that has forced the bankruptcy to be conducted with unusual secrecy.
GT Advanced would be liable for $50 million for each violation of the confidentiality agreement, according to court papers.
On Nasdaq, GT fell 32 percent to 87 cents, and Apple edged up 0.5 percent to $101.52 at mid-afternoon.
A hearing will be held on GT Advanced's requests on Wednesday in Springfield, Massachusetts.
The bankruptcy case is In re: GT Advanced Technologies Inc, U.S. Bankruptcy Court, District of New Hampshire, No. 14-11916 (Reporting by Tom Hals in Wilmington, Delaware; Additional reporting by Edwin Chan in San Francisco; Editing by Richard Chang)