A New Hampshire bankruptcy court’s decision on whether to shut down Apple’s Mesa plant was delayed until Tuesday, and layoffs of the facility’s 727 employees will begin that same day.
GT Advanced Technologies Inc. sent a letter to the Mesa City Council on Thursday, stating the permanent layoffs would be completed by Dec. 15.
The letter was sent on the same day that GT was delisted from the Nasdaq exchange, which is always a risk when a company undergoes bankruptcy. The New Hampshire-based company was trading at almost $11 per share before filing for bankruptcy last Monday. But by its last day of trading on Wednesday, shares were at 44 cents.
"It remains our view that the equity will be worthless at the end of the bankruptcy process," said Pavel Molchanov, an analyst with Raymond James, which dropped its coverage of GT after the delisting.
The rapid financial collapse of the sapphire glass supplier, which signed a $578 million contract with Apple just a year ago, has been shocking and quite unusual.
GT’s Chapter 11 filing on Oct. 6 indicated its intent to reorganize its debt and eventually reemerge with a fresh start. Bankruptcies are typically a slow process, and the company initially said operations would go on as usual during that time.
But things have quickly unraveled since then.
Within less than two weeks, GT’s stock prices plunged and the company was delisted from the public stock exchange. Also during that timeframe, GT asked the court for permission to end its contracts with Apple and shut down operations in Mesa and another facility in Massachusetts because it said it didn’t have the cash to keep them going.
The court was supposed to make a decision this past Wednesday, but the hearing was postponed to Oct. 21.
Considering GT’s letter to Mesa on Thursday, the shuttering of the facility appears to be inevitable. Apple technically owns the facility outright, but it’s unclear what the tech giant will do with it moving forward.
