Professional Documents
Culture Documents
See, e.g., In re Martin, 91 F.3d 389, 395 (3d Cir. 1996) (citing Fulton State Bank v. Schipper (In re
Schipper), 933 F.2d 513, 515 (7th Cir. 1991)); Licensing by Paolo, Inc. v. Sinatra (In re Gucci), 126 F.3d
380, 387 (2d Cir. 1997).
4
In re Aerovox, Inc., 269 B.R. 74 , 80 (Bankr.D.Mass.2001) (internal quotation marks and citations omitted);
see also Comm. Of Asbestos-Related Litigants and/or Creditors v. Johns-Manville Corp. (In re Johns-
Manville Corp.). 60 B.R. 612, 616 (Bankr. S.D.N.Y. 1986) ("Where the debtor articulates a reasonable
basis for its business decisions (as distinct from a decision made arbitrarily or capriciously), courts will
aenerally not entertain objections to the debtor's conduct.")
7
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Request for Approval of Incentive Plan
21. GTAT also requests authority to implement the Incentive Plan. The Incentive
Plan is designed to ensure that GTAT can wind down its operations properly, prudently, and as
efficiently as possible by encouraging individuals to complete specified wind down tasks.
GTAT believes that the Incentive Plan is critical to the Wind Down Process. It would be
significantly more expensive for GTAT to recruit, hire, and train new employees than to provide
a modest incentive to existing employees that will encourage them to continue to work for
GTAT during the Wind Down Process.
22. The proposed Incentive Plan will apply to those employees who GTAT
determines, in its sole discretion, are required to implement the Wind Down Process. The
proposed Incentive Plan includes the following terms and conditions:
An employee covered by the Incentive Plan (a "Covered Employee") will
be notified of the length of time that such Covered Employee will be
asked to stay in the employ of GTAT after the commencement of the
Wind Down Process to complete his or her assigned tasks (the "Task
Length").
Covered Employees will continue to be paid for actual time worked at
their current base salary rate as of the time that the Task Length is
communicated to them plus benefits.
All GTAT employment policies will remain in place with respect to
Covered Employees.
Upon the earlier of the completion of a Covered Employee's task or the
expiration of his or her Task Length, each such employee will be paid a
bonus (a "Completion Bonus") up to 15 per cent of the aggregate amount
of base salary for the assigned Task Length.
Completion Bonuses will not be pro-rated, except in the case of death or
disability. If GTAT releases a Covered Employee for other than cause
prior to the end of his or her assigned Task Length, the Completion Bonus
will be paid in full. If the Covered Employee voluntarily terminates his or
her employment or is discharged for cause prior to the end of the assigned
Task Length, no Completion Bonus will be paid.
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The Completion Bonus will be credited against any WARN Act notice
pay' or similar claims.
Covered Employees must release GTAT from any and all claims arising
out of or in connection with their employment with GTAT.
23. To the extent practicable, GTAT will attempt to use the funds it must pay to
employees under the WARN Act as incentive for Covered Employees to remain in the
company's employ without payment of a Completion Bonus.
24. The expected Task Lengths for the Incentive Plan, and the anticipated number of
employees and costs for each category (including payroll taxes, are as follows:
Task Length Estimated Number of
Employees Under Incentive
Program
Estimated Aggregate
Completion Bonus
Furnace Monitoring through
Completion of Growth: 4 weeks
3 $14,100
Furnace and Fabrication
Equipment Shutdown: 4 weeks
4 $13,100
Facility Systems Shutdown &
Securing Inventory: 6 weeks
6 $36,500
Total 13 $64,700
25. GTAT reserves the right to modify the Incentive Plan as needed, but consistent
with the terms described above, and request that the estates be authorized to pay total
compensation under the Incentive Plan of up to $64,700.
5
Under the Workers Adjustment and Retraining Notification Act of 1988, as amended (the "WARN Act"),
in the event of a "mass layoff," the employer must, among other things, pay wages to employees subject to
layoff. 29 U.S.C. 2102, et seq.
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26. The compensation to be provided under the Incentive Plan has been developed by
GTAT in its business judgment based upon GTAT's planning efforts. The Incentive Plan is
designed to assure that employees are incentivized to complete the important task of properly
winding down GTAT's operations at the Mesa facility and the Salem facility.
27. By this Motion, GTAT requests, pursuant to section 363(b) of the Bankruptcy
Code, that the estates be authorized to implement the Incentive Plan. As noted above, section
363(b) of the Bankruptcy Code permits a debtor to use property of the estate outside of the
ordinary course of its business where the use of such property represents an exercise of the
debtor's sound business judgment.6 GTAT believes that the implementation of the Incentive
Plan is justified under these circumstances, will accomplish a sound business purpose and will
assist in the effective and efficient wind down of GTAT's sapphire manufacturing operations at
their Mesa Facility and Salem Facility. Based on their evaluation of available alternatives, the
Debtors have determined that the measures proposed in this Motion are necessary to achieve, and
will achieve, their intended purpose of properly winding down such operations.
28. GTAT submits that the Incentive Plan does not conflict with section 503(c)(1) of
the Bankruptcy Code. Section 503(c)(I) only applies to payments that are meant to induce
insiders to remain with the debtor's business. 11 U.S.C. 503(c)(l). The term "insider" is
defined in section 101(31) of the Bankruptcy Code to include a "(i) director of the debtor; (ii)
officer of the debtor; (iii) person in control of the debtor; (iv) partnership in which the debtor is a
general partner; (v) general partner of the debtor; or (vi) relative of a general partner, director,
6
11 U.S.0 101(31)(B).
I 1
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Convertible Senior Notes due 2020, U.S. Bank National Association, 60 Livingston Avenue, St.
Paul, MN 55107, Attn: Hazrat R. Haniff; (d) the Internal Revenue Service, 1000 Elm St., 9th
Floor Manchester, NH 03101, Attn: District and Regional Directors; (e) U.S. Securities and
Exchange Commission, 100 F Street, NE, Washington, DC 20549; (f) Apple Inc., 1 Infinite
Loop, Cupertino, CA 95014, Attn: Jessica L. Fink, Senior Restructuring Counsel; and (g) those
parties who have formally filed requests for notice in these chapter 11 cases pursuant to
Bankruptcy Rule 2002; and (h) the counterparty to agreements listed on Schedule 1 to the
proposed order.
NO PRIOR REQUEST
33. No previous request for the relief sought herein has been made to the Court or any
other court.
WAIVER OF MEMORANDUM OF LAW
34. GTAT requests that the Court waive and dispense with the requirement set forth
in Rule 7102(b)(2) of the Local Bankruptcy Rules for the United States Bankruptcy Court for the
District of New Hampshire ("LBR") that any motion filed shall have an accompanying
memorandum of law. The legal authorities upon which GTAT relies are set forth in the Motion.
Accordingly, GTAT submits that a waiver of the LBR 7102(b)(2) requirement is appropriate
under these circumstances.
[remainder of page intentionally left blank]
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WHEREFORE, GTAT respectfully requests that the Court enter an order, substantially
in the form attached hereto, granting the relief requested herein and granting GTAT such other
and further relief as is just and proper.
Dated: October 10, 2014
Manchester, NH
/s/ Daniel W. Sklar
Daniel W. Sklar, Esq.
NIXON PEABODY LLP
900 Elm Street
Manchester, NH 03101-2031
Telephone: (603) 628-4000
Facsimile: (603) 628-4040
- and -
Luc A. Despins, Esq.
Andrew V. Tenzer, Esq.
James T. Grogan, Esq.
PAUL HASTINGS LLP
Park Avenue Tower
75 East 55th Street, First Floor
New York, New York 10022
Telephone: (212) 318-6000
Facsimile: (212) 319-4090
Proposed Co-Counsel for GTAT and Debtors in
Possession
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EXHIBIT A
PROPOSED ORDER
Case: 14-11916-HJB Doc #: 97-1 Filed: 10/10/14 Desc: Proposed Order Exhibit A Page 1
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UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEW HAMPSHIRE
x
In re: : Chapter 11
GT ADVANCED TECHNOLOGIES INC., et al.,: Case No. 14-11916-HJB
Debtors.'
: Joint Administration Requested
RE: Docket No.
x
ORDER (I) AUTHORIZING DEBTORS TO WIND DOWN OPERATIONS
AT SAPPHIRE MANUFACTURING FACILITIES AND (H) APPROVING
WIND DOWN EMPLOYEE INCENTIVE PLAN IN CONNECTION
WITH WIND DOWN OF SUCH OPERATIONS
Upon the motion (the "Motion" )2 of GT Advanced Technologies Inc. ("GT") and its
affiliated debtors as debtors in possession (collectively, "GTAT" or the "Debtors") for entry of
an order, pursuant to sections 105(a) and 363(b) of title 11 of the United States Code (the
"Bankruptcy Code"), authorizing (i) authorizing GTAT to wind down its operations at its
sapphire manufacturing facilities in Mesa, Arizona, and Salem, Massachusetts, and (ii)
approving a wind down employee incentive plan in connection with the wind down of such
operations; and upon consideration of the First Day Declaration and the Supplemental First Day
Declaration; and it appearing that the relief requested is in the best interests of GTAT's estates,
its creditors and other parties in interest; and this Court having jurisdiction to consider the
The Debtors, along with the last four digits of each debtor's tax identification number, as applicable, are:
GT Advanced Technologies Inc. (6749), GTAT Corporation (1760), GT Advanced Equipment Holding
LLC (832 9), GT Equipment Holdings, Inc. (0040), Lindbergh Acquisition Corp. (5073), GT Sapphire
Systems Holding LLC (4417), GT Advanced Cz LLC (9815), GT Sapphire Systems Group LLC (512 6),
and GT Advanced Technologies Limited (172 1). The Debtors' corporate headquarters are located at 2 43
Daniel Webster Highway, Merrimack, NH 03054.
2
Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Motion.
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Motion and the relief requested therein in accordance with 28 U.S.C. 157 and 1334; and
consideration of the Motion and the relief requested therein being a core proceeding pursuant to
28 U.S.C. 157(b); and venue being proper in this Court pursuant to 28 U.S.C. 1408 and
1409; and due and proper notice of the Motion being adequate and appropriate under the
particular circumstances; and this Court having determined that the legal and factual bases set
forth in the Motion establish just cause for the relief granted herein; and upon all of the
proceedings had before this Court; and after due deliberation and sufficient cause appearing
therefor, it is hereby ORDERED THAT:
1. The Motion is GRANTED as set forth herein.
2. The Wind Down Process is hereby approved and ratified in all respects.
3. GTAT is authorized, but not directed, to take any and all actions that are
necessary or appropriate in the exercise of its business judgment to implement the Wind Down
Process at the Mesa Facility and the Salem Facility, with reductions in associated supporting
personnel at GTAT's Merrimack, New Hampshire,.
4. The Incentive Plan is hereby approved and ratified in all respects.
5. GTAT is authorized, but not directed, to execute and deliver any and all
instruments and documents and to take any and all actions necessary or appropriate to
implement, effectuate, and fully perform under and in accordance with the terms of the Incentive
Plan, including, without limitation, making payments to certain employees thereunder.
6. The requirement set forth in LBR 7102(b)(2) that any motion filed shall have an
accompanying memorandum of law is waived.
7. The requirements set forth in Bankruptcy Rule 6003(b) have been satisfied or
otherwise deemed waived.
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8. All time periods set forth in this Order shall be calculated in accordance with
Bankruptcy Rule 9006(a).
9. GTAT is authorized and empowered to take all actions necessary to implement
the relief granted in this Order.
10. This Court retains jurisdiction with respect to all matters arising from or related to
the interpretation, implementation, or enforcement of this Order.
Dated: , 2014
Manchester, NH
HONORABLE HENRY J. BOROFF
UNITED STATES BANKRUPTCY JUDGE
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