Details of Apple's (AAPL) relationships with vendors are coming out in the bankruptcy hearings for GT Advanced Technologies, and they aren't pretty. One is that Apple's nondisclosure agreement (NDA) included a $50 million penalty should a company leak information about an upcoming product.
Furthermore, GT Advanced, which has been the leading manufacturer of sapphire glass and had entered a partnership on a new facility with Apple, has argued that its supplier agreement was "oppressive and burdensome" and that more details of Apple's dealings should be released.
Apple's NDAs have long been considered among the harshest and most stringent in the tech industry. The company has always been notoriously tight-lipped and controlling of its image and information about strategy and product plans.
Last fall, GT Advanced announced that it was partnering with Apple to build a new $578 million plant in Arizona, $429 million of which it advanced to GT Advanced. Apple would design and pay for the facilities, and then lease them to GT Advanced. The assumption had been that Apple planned to use sapphire glass in either the Apple Watch or iPhone 6 display. However, the highly popular new smartphone model still uses Gorilla Glass from Corning (GLW).
And the announced five-year partnership came to an end after less than one when GT Advanced announced a surprise bankruptcy filing. The company wants to shut down the Mesa, Ariz., location as well as a factory in Salem, Mass. "This drastic step is necessitated by GTAT's liquidity crisis and the ongoing cash burn from its operations at these locations," GT Advanced said in a court filing.
Apple had previously said that it was surprised by the filing. The company's deals generally heavily favor itself, but vendors often want to do business with the tech giant for the chance to increase manufacturing efficiencies through larger-scale operations and to attract other customers. But a factory used exclusively for one customer reduces the benefits the vendor can gain.
Apple will likely oppose the release of any more information about its dealings, but whether it will ultimately be successful is unclear.
Apple did not respond to a CBS MoneyWatch request for comment.