gtat ex parte motion

7/27/2019 GTAT Ex Parte Motion

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UNITED STATES BANKRUPTCY COURT

DISTRICT OF NEW HAMPSHIRE

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I n re:

GT ADVANCED TECHNOLOGIES INC.,et al.,

Debtors.1

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Chapter 11

Case No. 14-_______ (____)

Joint Administration Requested

DEBTORS EMERGENCYEX PARTEMOTION, PURSUANT TO

BANKRUPTCY CODE SECTIONS 105(a) AND 362, FOR ENTRY OF

INTERIM AND FINAL ORDERS, ESTABLISHING NOTIFICATION

PROCEDURES AND APPROVING RESTRICTIONS ON CERTAINTRANSFERS OF CLAIMS AGAINST AND EQUITY INTERESTS IN

THE DEBTORSNUNC PRO TUNCTO THE PETITION DATE

GT Advanced Technologies Inc. (GT) and its affiliated debtors as debtors in possession

in the above-captioned cases (collectively, GTAT or the Debtors) hereby submit this motion

(the Motion), pursuant to sections 105(a) and 362 of title 11 of the United States Code (the

Bankruptcy Code), for the entry of an interim order substantially in the form attached as

Exhibit A (the Interim Order) and a final order substantially in the form attached as Exhibit B

(the Final Order, together with the Interim Order, the Orders) establishing notification

procedures and approving restrictions on certain transfers of claims against and equity interests

in GTAT. In support of this Motion, GTAT respectfully represents:

1 The Debtors, along with the last four digits of each debtors tax identification number, as applicable, are:GT Advanced Technologies Inc. (6749), GTAT Corporation (1760), GT Advanced Equipment HoldingLLC (8329), GT Equipment Holdings, Inc. (0040), Lindbergh Acquisition Corp. (5073), GT SapphireSystems Holding LLC (4417), GT Advanced Cz LLC (9815), GT Sapphire Systems Group LLC (5126),and GT Advanced Technologies Limited (1721). The Debtors corporate headquarters are located at 243Daniel Webster Highway, Merrimack, NH 03054.

Case: 14-11916 Doc #: 15 Filed: 10/06/14 Desc: Main Document Page 1 of 131


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JURISDICTION, VENUE AND STATUTORY BASIS

1. The Court has jurisdiction over this matter pursuant to 28 U.S.C. 157 and

1334. This matter is a core proceeding within the meaning of 28 U.S.C. 157(b)(2). Venue is

proper pursuant to 28 U.S.C. 1408 and 1409.

2. The statutory bases for the relief requested herein are sections 105(a) and 362 of

the Bankruptcy Code.

BACKGROUND

3. On the date hereof (the Petition Date), GTAT commenced voluntary cases

under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District

of New Hampshire (the Court). GTAT continues to operate its business and manage its

properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy

Code. No request for the appointment of a trustee or examiner has been made in these chapter

11 cases and no committees have been appointed or designated.

4. GTAT has requested that these chapter 11 cases be consolidated for procedural

purposes only and jointly administered pursuant to Bankruptcy Rule 1015(b).

5. Information regarding GTATs business, capital structure, and the circumstances

leading to these chapter 11 cases is set forth in theDeclaration of Daniel W. Squiller in Support

of Chapter 11 Petitions and First-Day Motions (the First Day Declaration), which is

incorporated herein by reference and filed contemporaneously herewith.

GTATs Business

6. GTAT and its non-Debtor affiliates (collectively, the GTAT Group) are leading

manufacturers and suppliers of advanced materials and equipment for the global consumer

electronics, power electronics, solar, and LED industries. The GTAT Group designs and sells



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high-quality sapphire production equipment and materials for a wide variety of domestic and

international markets, including the consumer electronics market. In addition, the GTAT

Groups historical business is based in the solar industry, where it is a leading provider of key

polysilicon and photovoltaic equipment, services, and technologies. The GTAT Group is also in

the process of developing and commercializing additional equipment and products, including an

ion implantation equipment tool and advanced solar cell metallization and interconnect

technology. As of the Petition Date, the GTAT Group employs approximately 1,100 full-time

employees in the United States and abroad, approximately 1,000 of whom work for the Debtors.

The stock of GT is publicly traded under the symbol GTAT.

7. As of June 28, 2014, the GTAT Groups unaudited and consolidated financial

statements reflected assets totaling approximately $1.5 billion and liabilities totaling

approximately $1.3 billion.

RELIEF REQUESTED

8. By this Motion, GTAT seeks entry of Orders authorizing GTAT to establish

procedures as set forth herein (the Procedures) to protect the potential value of GTATs

consolidated net operating loss carryforwards (NOLs) and certain other tax attributes

(collectively with the NOLs, the Tax Attributes) by restricting certain transfers of claims

against and equity interests in GTAT. The proposed Procedures apply to the common stock of

GT and any options or similar interests to acquire such stock (the GT Stock) and certain claims

against GTAT (as defined below, the Claims). The Procedures set out certain restrictions and

notification requirements to be effectivenunc pro tuncto the Petition Date.

9. Parties would be notified of the Procedures through (i) publication of a notice,

substantially in the form annexed hereto as Exhibit C (the Interim Procedures Notice), which



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notice shall describe the trading restrictions and notification requirements established in the

Interim Order and the date of the final hearing to determine whether the procedures described

herein will be approved on a final basis and (ii) publication of a final notice of the approved

procedures, substantially in the form annexed hereto as Exhibit D (the Final Procedures

Notice).

Tax Attributes

10. GTAT estimates that, as of December 31, 2014, GTAT will have NOLs of

approximately $152 million and certain other Tax Attributes.

11. GTATs Tax Attributes are valuable assets of its estates because. The Internal

Revenue Code (the Tax Code) generally permits corporations to carry forward NOLs and tax

credits to offset future income, thereby reducing their future tax liability.2 The Tax Attributes

potentially allow GTAT to reduce significantly future federal income tax liability, depending

upon future operating results of GTAT and absent any intervening limitations. Any such savings

could enhance GTATs cash position for the benefit of all parties in interest.

12. GTATs ability to use Tax Attributes to offset future income tax liability is

subject to certain statutory limitations. Specifically, sections 382 and 383 of the Tax Code limit

a corporations use of its NOLs and certain other tax attributes to offset future income after the

corporation experiences an ownership change. For purposes of section 382 of the Tax Code

(Section 382), a change of ownership occurs if the percentage of a loss companys equity held

by one or more 5% shareholders increases by more than 50 percentage points over the lowest

2 See26 U.S.C. 172.



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percentage of stock owned by those shareholders at any time during a three-year rolling testing

period.

13. A Section 382 change of ownership prior to the effective date of a chapter 11 plan

of reorganization would effectively eliminate GTATs ability to obtain meaningful benefit from

its NOLs, causing a significant loss of value to GTATs estates.

The Safe Harbor

14. The limitations imposed by Section 382 in the context of an ownership change

pursuant to a confirmed plan of reorganization are significantly more relaxed than those

applicable outside chapter 11.

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Under Section 382(l)(5) of the Tax Code, a corporation is not

subject to the annual limitation ordinarily imposed by section 382 with respect to an ownership

change resulting from consummation of a plan of reorganization, so long as the debtors pre-

change shareholders (i.e.,persons or entities who owned the debtors stock immediately before

the relevant ownership change) and/or Qualified Creditors (as defined below) emerge from the

reorganization owning at least 50% of the total value and voting power of the debtors stock

immediately after the ownership change (the 382(l)(5) Safe Harbor).4 GTAT could lose the

potential benefit of the 382(l)(5) Safe Harbor as a result of trading and accumulation of GT Stock

or Claims prior to emergence from chapter 11.

15. Consistent with the automatic stay in these cases, GTAT needs the ability to

preclude certain transfers of, and monitor and possibly object to other changes in the ownership

of, GT Stock and Claims, to ensure that a 50% change of ownership does not occur prior to the

3 See26 U.S.C. 382(1)(5), (6).

4 26 U.S.C. 382(1)(5)(A).



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effective date of a chapter 11 plan and that GTAT can rely on the 382(1)(5) Safe Harbor relief if

it is otherwise available. Therefore, it is important that this relief be granted immediately.

16. Under section 382(1)(5)(E) of the Tax Code and the United States Department of

Treasury Regulations (the Treasury Regulations) promulgated thereunder, a creditor whose

claim is exchanged for stock under a plan of reorganization is a Qualified Creditor for Section

382 purposes if such claim constitutes qualified indebtedness.5 Generally, a claim constitutes

qualified indebtedness if it either (i) has been owned by such creditor for 18 or more months

prior to the date of filing of the bankruptcy petition or (ii) arose in the ordinary course of the

debtors business and was at all times beneficially owned by such creditor. Creditors also may

be classified as qualified, despite not satisfying the continuous ownership requirements under

either (i) or (ii) of the preceding sentence, if such creditors meet the criteria set forth in the de

minimis rule described below.

17. Under Treasury Regulations section 1.382-9(d)(3) (the de minimis rule), a

debtor may, for purposes of the 382(l)(5) Safe Harbor, treat indebtedness as always having

been owned by the beneficial owner of the indebtedness immediately before the ownership

change if the beneficial owner is not, immediately after the ownership change, either a 5%

shareholder or an entity through which a 5% shareholder owns an indirect ownership interest in

the debtor. Such a claimholder will always be regarded as a Qualified Creditor under the

382(l)(5) Safe Harbor unless the claimholders particular claims themselves preclude the

claimholders Qualified Creditor status.

5 SeeTreasury Regulations 1.382-9(d)(1).



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18. In furtherance of the automatic stay provisions of section 362 of the Bankruptcy

Code, and pursuant to section 105 of the Bankruptcy Code, GTAT has the authority to preclude

certain transfers of, and monitor and possibly object to other changes in the ownership of, GT

Stock and Claims. This would ensure that a 50% change of ownership does not occur before the

effective date of a chapter 11 plan and to preserve GTATs ability to utilize the 382(l)(5) Safe

Harbor if that proves to be advantageous.

Proposed Trading and Other Disposition Procedures

19. To preserve the potential value of the Tax Attributes and ensure that GTAT

receives the full benefits of the automatic stay, GTAT proposes that the following Procedures

apply to an acquisition or disposition of GT Stock and Claims, effective nunc pro tuncto the

Petition Date:

(a) GT Stock Ownership, Acqui sit ion , and Di spositi on

(i) Notice of Substantial GT Stock Ownership. Any person or entity (as suchlatter term is defined in section 1.382-3(a) of the Treasury Regulations,including persons acting pursuant to a formal or informal understandingamong themselves to make a coordinated acquisition, an Entity) that

beneficially owns, at any time on or after the Petition Date, GT Stock (ashereinafter defined) in an amount sufficient to qualify such person orEntity as a Substantial Equityholder (as hereinafter defined) shall file withthe Court, and serve upon GTAT, GTATs proposed counsel, and thecounsel for any statutory committee of unsecured creditors appointed inthese cases (the Committee), a Notice of Substantial Stock Ownership (aSubstantial Ownership Notice), in the form attached as Exhibit 1 to theOrders, which describes specifically and in detail the GT Stock ownershipof such person or Entity, on or before the date that is the later of: (a) ten(10) business days after the entry of the Interim Order or the Final Order,as applicable, and (b) ten (10) business days after that person or Entity

qualifies as a Substantial Equityholder. At the election of the SubstantialEquityholder, the Substantial Ownership Notice to be filed with the Court(but not such notice served upon GTAT, GTATs proposed counsel andthe Committees counsel) may be redacted to exclude the SubstantialEquityholders taxpayer identification number and the number of shares ofGT Stock that the Substantial Equityholder beneficially owns.



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(ii) Acquisition of GT Stock or Options. At least twenty (20) business daysprior to the proposed date of any transfer of equity securities (includingOptions, as hereinafter defined, to acquire such securities) that wouldresult in an increase in the amount of GT Stock beneficially owned by any

person or Entity that currently is or subsequently becomes a Substantial

Equityholder or that would result in a person or Entity becoming aSubstantial Equityholder (a Proposed Equity Acquisition Transaction),such person, Entity or Substantial Equityholder (a Proposed EquityTransferee) shall file with the Court, and serve upon GTAT, GTATs

proposed counsel, and the Committees counsel, a Notice of Intent toPurchase, Acquire, or Otherwise Accumulate GT Stock (an EquityAcquisition Notice), in the form annexed as Exhibit 2 to the Orders,which describes specifically and in detail the proposed transaction inwhich GT Stock is to be acquired. At the election of the Proposed EquityTransferee, the Equity Acquisition Notice that is filed with the Court (butnot such notice served upon GTAT, GTATs proposed counsel and the

Committees counsel) may be redacted to exclude the Proposed EquityTransferees taxpayer identification number and the number of shares ofGT Stock that the Proposed Equity Transferee beneficially owns and

proposes to purchase or otherwise acquire.

(iii) Disposition of GT Stock or Options. At least twenty (20) business daysprior to the proposed date of any transfer or other disposition of equitysecurities (including Options to acquire such securities) that would resultin a decrease in the amount of GT Stock beneficially owned by aSubstantial Equityholder or that would result in a person or Entity ceasingto be a Substantial Equityholder (a Proposed Equity DispositionTransaction, and together with a Proposed Equity AcquisitionTransaction, a Proposed Equity Transaction), such person, Entity, orSubstantial Equityholder (a Proposed Equity Transferor) shall file withthe Court, and serve upon GTAT, GTATs proposed counsel, and theCommittees counsel, a Notice of Intent to Sell, Trade, or OtherwiseTransfer GT Stock (an Equity Disposition Notice, and together with anEquity Acquisition Notice, an Equity Trading Notice), in the formannexed as Exhibit 3 to the Orders, which describes specifically and indetail the proposed transaction in which GT Stock would be transferred.At the election of the Proposed Equity Transferor, the Equity Disposition

Notice that is filed with the Court (but not such notice served upon GTAT,GTATs proposed counsel and the Committees counsel) may be redacted

to exclude the Proposed Equity Transferors taxpayer identificationnumber and the number of shares of GT Stock that the Proposed EquityTransferor beneficially owns and proposes to sell or otherwise transfer.

(iv) Objection Procedures. GTAT and the Committee shall have fifteen (15)business days after the filing of an Equity Trading Notice (the EquityObjection Deadline) to file with the Court and serve on a ProposedEquity Transferee or a Proposed Equity Transferor, as the case may be, an



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objection to any proposed transfer of equity securities (including Optionsto acquire such securities) described in such Equity Trading Notice on thegrounds that such transfer may adversely affect GTATs ability to utilizethe Tax Attributes (an Equity Objection) as a result of an ownershipchange under Section 382.

(1) If GTAT or the Committee files an Equity Objection by the EquityObjection Deadline, then the Proposed Equity Transaction shallnot be effective unless approved by a final and nonappealableorder of this Court.

(2) If GTAT or the Committee do not file an Equity Objection by theEquity Objection Deadline, or if GTAT and the Committee providewritten authorization to the Proposed Equity Transferee or theProposed Equity Transferor, as the case may be, approving theProposed Equity Transaction, prior to the Equity ObjectionDeadline, then such Proposed Equity Transaction may proceed

solely as specifically described in the Equity Trading Notice.

(v) Additional Acquisitions. Any additional transaction within the scope ofparagraphs (a)(ii) or (a)(iii) above must be the subject of an additionalnotice as set forth herein with the applicable waiting period.

(vi) Definitions. For purposes of this Motion and the Proposed Order, thefollowing terms have the following meanings:

(1) Substantial Equityholder. A Substantial Equityholder is anyperson or Entity that beneficially owns, or any Entity controlled by

such person or Entity through which such person or Entitybeneficially owns, at least 4.75% of all issued and outstandingshares of GT Stock.

(2) Beneficial Ownership. Beneficial ownership (or any variationthereof) of GT Stock and Options to acquire GT Stock shall bedetermined in accordance with applicable rules under Section 382,the Treasury Regulations promulgated thereunder and rulingsissued by the Internal Revenue Service, and, thus, to the extent

provided in those rules, from time to time shall include, withoutlimitation, (A) direct and indirect ownership (e.g.,a holding

company would be considered to beneficially own all stock ownedor acquired by its subsidiaries), (B) ownership by a holders familymembers and any group of persons acting pursuant to a formal orinformal understanding to make a coordinated acquisition of stock,and (C) to the extent provided in Treasury Regulations section1.382-4, the ownership of an Option to acquire GT Stock.



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(3) Option. An Option to acquire stock includes any contingentpurchase, warrant, convertible debt, put, stock subject to risk offorfeiture, contract to acquire stock, or similar interest regardlessof whether it is contingent or otherwise not currently exercisable.

(4) GT Stock. GT Stock shall mean all common stock of GT. Forthe avoidance of doubt, by operation of the definition of beneficialownership, an owner of an Option to acquire GT Stock may betreated as the owner of such GT Stock.

(b) Trading in Claims of GTAT

(i) Notice of Substantial Claimholder Status; Notice of 382(l)(5) Plan.

(1) Any person or Entity (as such term is defined in TreasuryRegulations section 1.382-3(a), including persons acting pursuantto a formal or informal understanding among themselves to make a

coordinated acquisition) that currently is or becomes a SubstantialClaimholder (as hereinafter defined) shall file with the Court andserve upon GTAT, GTATs proposed counsel, and theCommittees counsel, a notice of such status (a Notice ofSubstantial Claimholder Status), in the form annexed to theOrders as Exhibit 4, within ten (10) business days of the later of(A) the entry of the Interim Order or the Final Order, as applicable,and (B) the date on which such person or Entity becomes aSubstantial Claimholder. At the election of the SubstantialClaimholder, the Notice of Substantial Claimholder Status that isfiled with the Court (but not the Notice of Substantial Claimholder

Status that is served upon GTAT, GTATs proposed counsel, andthe Committees counsel) may be redacted to exclude theSubstantial Claimholders taxpayer identification number and theaggregate dollar amount of Claims (as hereinafter defined) that theSubstantial Claimholder beneficially owns.

(2) Upon filing a plan and disclosure statement that contemplates thepotential utilization of section 382(1)(5) of the Tax Code (the382(1)(5) Plan), GTAT shall (A) publish (or arrange for

publication of) a notice and provide a written notice to the NoticeParties and Electing Claimholders (each as hereinafter defined),

disclosing the filing of such 382(1)(5) Plan and the potentialissuance of a Sell-Down Notice (as hereinafter defined) inconnection therewith on the website to be established by theDebtors claims and noticing agent (the Claims and NoticingAgent) and in the national edition ofThe Wall Street Journal(aNotice of 382(1)(5) Plan), (B) identify the Threshold Amount (ashereinafter defined) of Claims for status as a SubstantialClaimholder and (C) request from each Electing Claimholder



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(including a Deemed Electing Claimholder (as hereinafterdefined)) updated information regarding the aggregate amount ofClaims beneficially owned by such Electing Claimholder, whichupdated information shall be delivered by such ElectingClaimholder to the Debtors within ten (10) business days of receipt

of the request therefor or, in the case of a Deemed ElectingClaimholder, ten (10) business days of the date of the Notice of382(1)(5) Plan.

For the avoidance of doubt, GTAT shall have no obligation underthe Orders to provide notice to any Deemed Electing Claimholderof the matters set forth in this Paragraph (b)(i)(2), and the lack ofsuch notice shall not limit the obligation of a Deemed ElectingClaimholder to comply with the requirements of a SellDown

Notice (as hereinafter defined) or affect the application of theEquity Forfeiture Provision (as hereinafter defined) with respect tosuch Deemed Electing Claimholder.

(3) GTAT shall disclose the Threshold Amount in the Notice of382(1)(5) Plan as of the date of the Notice of 382(1)(5) Plan basedon then available information, including any change in theThreshold Amount. GTAT may adjust the Threshold Amount

based on the updated information from Electing Claimholderspursuant to paragraph (b)(i)(2) herein. If the Threshold Amount isadjusted, GTAT shall provide a notice of such adjusted amount inthe same manner as the Notice of 382(1)(5) Plan and such noticeshall be treated as an amended Notice of 382(1)(5) Plan, therebyrequesting updated information from each Electing Claimholder

and Deemed Electing Claimholder.

(ii) Advance Approval of Acquisition Provisions.

(1) Acquisition of Claims. Except as provided in paragraph (b)(v) andthe Electing Claimholder provisions in paragraph (b)(iii) herein, atleast twenty (20) business days prior to the proposed date of anytransfer of Claims that would result in (A) an increase in the dollaramount of Claims beneficially owned by a Substantial Claimholderor (B) any person or Entity becoming a Substantial Claimholder (aProposed Claims Acquisition Transaction), such person, Entity,

or Substantial Claimholder (a Proposed Claims Transferee) mayfile with the Court and serve upon GTAT, GTATs proposedcounsel, and the Committees counsel, a Notice of Request toPurchase, Acquire, or Otherwise Accumulate a Claim (a ClaimsAcquisition Request), in the form annexed to the Orders asExhibit 5, which describes in detail the intended acquisition ofClaims, regardless of whether such transfer would be subject to thefiling, notice, and hearing requirements set forth in Bankruptcy



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Rule 3001. At the Proposed Claims Transferees election, theClaims Acquisition Request that is filed with the Court (but not theClaims Acquisition Request that is served upon GTAT, GTATs

proposed counsel, and the Committees counsel) may be redactedto exclude the Proposed Claims Transferees taxpayer

identification number and the aggregate dollar amount of Claimsthe Proposed Claims Transferee beneficially owns and proposes topurchase or otherwise acquire.

(2) Approval Procedures. GTAT may determine, in furtherance of thepurposes of the Procedures and in consultation with counsel for theCommittee, whether or not to approve a Claims AcquisitionRequest. If GTAT does not approve a Claims Acquisition Requestin writing within fifteen (15) business days after the ClaimsAcquisition Request is filed with the Court, the Claims AcquisitionRequest shall be deemed rejected. In the event a Proposed ClaimsTransferees request is rejected prior to the date of a Notice of382(1)(5) Plan, and the Proposed Claims Transferee still desires to

pursue the Proposed Claims Acquisition Transaction, the ProposedClaims Transferee is subject to, and may avail itself of, theElecting Claimholders provisions in paragraph (b)(iii) below.

(iii) Electing Claimholders.

(1) Any person or Entity generally may trade freely and make amarket in Claims without having to obtain advance approval asotherwise required under paragraph (b)(ii) herein (the AdvanceApproval of Acquisition Provisions) if such person or Entity

makes an election pursuant to, and abides by the provisions of, thisParagraph (b)(iii). In order to make such election, a person orEntity shall file with the Court and serve upon GTAT, GTATs

proposed counsel, and the Committees counsel, an election notice,in the form annexed to the Orders as Exhibit 6 (the Election

Notice), within ten (10) business days after the later of (A) thedate of the first purchase or acquisition of, or other increase in the

beneficial ownership (as hereinafter defined) of, Claims by aSubstantial Claimholder following the entry of the Interim Orderor the Final Order, as applicable, and (B) the date of any purchaseor acquisition of, or other increase in the beneficial ownership of,

Claims that causes such person or Entity to become a SubstantialClaimholder. The filing or service of such Election Notice shallconstitute acceptance of the terms and conditions set forth in theElection Notice and in this paragraph (b)(iii) by a person or Entitywho files or serves such Election Notice (an ElectingClaimholder). An Electing Claimholder shall remain subject tothe initial notice requirements of paragraph (b)(i) herein.



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(2) To permit reliance by GTAT on Treasury Regulations section1.382-9(d)(3), any Electing Claimholder shall not participate informulating any chapter 11 plan of reorganization of or on behalfof GTAT (which shall include, without limitation, making anysuggestions or proposals to GTAT or its advisors with regard to

such a plan); provided, however, that the following activities shallnot constitute participation in formulating a plan of reorganizationif; in pursuing such activities, the Electing Claimholder does notdisclose or otherwise make evident (unless compelled to do so byan order of a court of competent jurisdiction or some otherapplicable legal requirement) to GTAT that such ElectingClaimholder has beneficial ownership of Newly Traded Claims (ashereinafter defined): filing an objection to a proposed disclosurestatement or to confirmation of a proposed plan of reorganization;voting to accept or reject a proposed plan of reorganization;reviewing or commenting on a proposed business plan; providing

information on a confidential basis to the attorneys for GTAT;general membership on an official committee or an ad hoccommittee; or taking any action required by the order of the Court.

(3) Following the issuance of a Notice of 382(1)(5) Plan, if GTATdetermines it to be reasonably necessary to require the sale ortransfer of all or a portion of the beneficial ownership of Claims byan Electing Claimholder on the basis that such sale or transfer isappropriate to reasonably ensure that the requirements of section382(1)(5) of the Tax Code will be satisfied, GTAT may request,after notice to each Electing Claimholder and the Committee and ahearing, that the Court enter an order approving the issuance of anotice (the Sell-Down Notice) to the Electing Claimholder thatsuch Electing Claimholder must sell, cause to sell, or otherwisetransfer all or a portion of its beneficial ownership of Claims (byclass or other applicable breakdown) in excess of (A) the amountof Claims beneficially owned by such Electing Claimholder over(B) the Maximum Amount (as hereinafter defined) for suchElecting Claimholder (such excess amount, an Excess Amount).If the Court approves GTATs issuance of a Sell-Down Notice, theDebtors may provide the SellDown Notice to the relevant ElectingClaimholders.

Prior to (A) the effective date of the 382(1)(5) Plan or (B) suchearlier date specified by GTAT but no earlier than the day afterthe entry of the order confirming the 382(1)(5) Plan (the SellDown Date), each Electing Claimholder shall sell, cause to sell,or otherwise transfer an amount of the beneficial ownership ofClaims (if any) necessary to comply with the Sell-Down Notice(the Sell-Down); provided, however, that notwithstandinganything to the contrary in the Order, no Electing Claimholder



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shall be required to sell, cause to sell, or otherwise transfer anybeneficial ownership of Claims if such sale would result in theElecting Claimholder having beneficial ownership of an aggregateamount of Claims (by class or other applicable breakdown) that isless than such Electing Claimholders Protected Amount (as

hereinafter defined). Each Electing Claimholder shall sell, causeto sell, or otherwise transfer its beneficial ownership of Claimssubject to the Sell-Down to Permitted Transferees (as hereinafterdefined); provided, however, that such Electing Claimholder shallnot have a reasonable basis to believe that any such PermittedTransferee would own, immediately after the contemplatedtransfer, an Excess Amount of Claims.

An Electing Claimholder subject to the Sell-Down shall,within five (5) business days after the later of (i) entry of anorder approving the 382(1)(5) Plan, (ii) the Sell-Down Date,and (iii) such other date specified in the Sell-Down Notice, asapplicable, but before the effective date of the 382(1)(5) Plan,and as a condition to receiving Affected Securities (ashereinafter defined), serve upon GTAT, GTATs proposedcounsel, and the Committees counsel, a notice substantially inthe form annexed to the Orders as Exhibit 7 that such ElectingClaimholder has complied with the terms and conditions setforth in this paragraph (b)(iii)(3) and that such ElectingClaimholder does not and will not hold an Excess Amount ofClaims as of the Sell-Down Date and at all times through theeffective date of the 382(1)(5) Plan (the Notice ofCompliance). Any Electing Claimholder who fails to complywith this provision shall not receive Affected Securities withrespect to any Excess Amount ofClaims.

(4) Except to the extent necessary to demonstrate to the Court the needfor the issuance of a Sell-Down Notice, other than informationcontained in the Election Notices that is public or in connectionwith an audit or other investigation by the IRS or other taxingauthority, GTAT shall keep all Election Notices and any additionalinformation provided by an Electing Claimholder pursuant to

paragraph (b)(iii)(3) strictly confidential and shall not disclose theidentity of the Electing Claimholder to any other person or Entity;

provided, however, that GTAT may disclose the identity of theElecting Claimholder to its counsel and professional financialadvisors and/or the counsel and professional financial advisors ofthe Committee and of any other person(s) that are subject to anondisclosure agreement with GTAT, each of whom shall keep allsuch notices strictly confidential, subject to further order of theCourt; and provided, further, that to the extent GTAT reasonablydetermines such confidential information is necessary to



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demonstrate to the Court the need for the issuance of a Sell-DownNotice, such confidential information (determined by, among otherthings, whether such information was redacted in any public filing)shall be filed under seal.

(5) Any proposed transfer or acquisition of Claims following theissuance of a Notice of 382(1)(5) Plan shall be subject to theAdvance Approval of Acquisition Provisions set forth in Paragraph(b)(ii) herein.

(6) Any Electing Claimholder that violates its obligations under anElection Notice shall, pursuant to the Order, be precluded fromreceiving, directly or indirectly, any consideration consisting of a

beneficial ownership of equity (including Options, as defined inparagraph (a)(v)(3) herein) of GTAT (or any successor to GTAT,including as determined for U.S. federal income tax purposes) thatis attributable to the Excess Amount of Claims for such Electing

Claimholder, including any consideration in lieu thereof; provided,however, that such Electing Claimholder may be entitled to receiveany other consideration to which such Electing Claimholder may

be entitled by virtue of holding Claims (the Equity ForfeitureProvision). Any purported acquisition of, or other increase in the

beneficial ownership of, equity of GTAT (or any successor) that isprecluded by the Equity Forfeiture Provision will be an acquisitionof Forfeited Equity. Any acquirer of Forfeited Equity shall,immediately upon becoming aware of such fact, return or cause toreturn the Forfeited Equity to GTAT (or any successor to GTAT)or, if all of the equity consideration properly issued to such

acquirer and all or any portion of such Forfeited Equity shall havebeen sold prior to the time such acquirer becomes aware of suchfact, such acquirer shall return or cause to return to GTAT (or anysuccessor to GTAT) (A) any Forfeited Equity still held by suchacquirer and (B) the proceeds attributable to the sale of ForfeitedEquity, calculated by treating the most recently sold equity asForfeited Equity. Any acquirer that receives Forfeited Equity anddeliberately fails to comply with the preceding sentence shall besubject to such additional sanctions as the Court may determine.Any Forfeited Equity returned to GTAT shall be distributed(including a transfer to charity) or extinguished, in GTATs sole

discretion, in furtherance of the 382(1)(5) Plan.

(7) In effecting any sale or other transfer of Claims pursuant to a SellDown Notice, an Electing Claimholder shall, to the extent that it isreasonably feasible to do so within the normal constraints of themarket in which such sale takes place, notify the acquirer of suchClaims of the existence of the Order and the Equity ForfeitureProvision (it being understood that, in all cases in which there is



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direct communication between a salesperson and a customer,including, without limitation, communication via telephone, email, and instant messaging, the existence of the Order and theEquity Forfeiture Provision shall be included in such salespersonssummary of the transaction).

(iv) Deemed Electing Claimholders; Sanctions.

(1) Notwithstanding the foregoing, effective as of the Petition Dateand until further order of the Court to the contrary, any person orEntity that (A) is not a Substantial Claimholder and purchases,acquires, or otherwise increases the beneficial ownership of Claimsthat causes such person or Entity to become a SubstantialClaimholder, or (B) is a Substantial Claimholder and purchases,acquires, or otherwise increases the beneficial ownership ofClaims, shall either comply with the Advance Approval ofAcquisition Provisions pursuant to paragraph (b)(ii) or, to the

extent permitted in Paragraph (b)(iii) herein, file an ElectionNotice and thereby become an Electing Claimholder; provided,however, that any such person or Entity that neither satisfies theAdvance Approval of Acquisition Provisions nor files a timelyElection Notice shall be deemed to have filed an Election Noticeon the Petition Date and to have become an Electing Claimholder(a Deemed Electing Claimholder) for all purposes of the Order(other than the issuance of a direct notice to Electing Claimholders,whenever required). Deemed Electing Claimholders shall besubject to all the obligations of Electing Claimholders, including,without limitation, the requirement that Electing Claimholders sell,

cause to sell, or otherwise transfer all or a portion of the beneficialownership of Claims pursuant to a Sell-Down Notice or be subjectto the Equity Forfeiture Provision. Nothing in this paragraph(b)(iv) shall be read to relieve a Deemed Electing Claimholder ofits obligations to notify GTAT of such Deemed ElectingClaimholders status as a Substantial Claimholder. Except asotherwise provided in the Procedures, all references to an ElectingClaimholder in the Procedures and in the Order shall include aDeemed Electing Claimholder.

(2) Effective as of the Petition Date, any purchase or acquisition of, or

other increase in the beneficial ownership of, Claims in violationof the Orders by a Substantial Claimholder shall be subject to suchremedy as the Court may find to be appropriate upon motion byGTAT, including, without limitation, ordering such noncompliantSubstantial Claimholder to divest itself promptly of any beneficialownership of Claims purchased or otherwise acquired in violationof the Orders and monetary damages for any costs incurred byGTAT in connection with the enforcement of the Orders. For the



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avoidance of doubt, any sanctions imposed by the Court on anoncompliant Substantial Claimholder pursuant to this paragraph(b)(iv)(2) shall be in addition to the consequences of treating suchnoncompliant Substantial Claimholder as a Deemed ElectingClaimholder for all purposes of the Orders.

(v) Exception. No person or Entity shall be subject to the Advance Approvalof Acquisition Provisions of paragraph (b)(ii) herein or the ElectingClaimholders provisions of paragraph (b)(iii) herein with respect to anytransfer described in Treasury Regulations section 1.382-9(d)(5)(ii);

provided, however, that such transfer is not for a principal purpose ofobtaining stock in the reorganized GTAT (or any successor) or permittingthe transferee to benefit from the losses of GTAT within the meaning ofTreasury Regulations section 1.382-9(d)(5)(iii); and provided, further, thatany such transferee who becomes a Substantial Claimholder shall file withthe Court, and serve upon GTAT, GTATs proposed counsel and theCommittee counsel, a notice of such status, in the form annexed to theOrders as Exhibit 4, within ten (10) business days of the later of (i) thedate of the entry of the Interim Order or the Final Order, as applicable, bythe Court and (ii) the date on which such person or Entity becomes aSubstantial Claimholder.

(vi) Definitions. For purposes of this Motion and the Orders, the followingterms have the following meanings:

(1) Applicable Percentage. Applicable Percentage means, if onlyone class of Affected Securities is to be issued pursuant to theterms of the 382(1)(5) Plan and holders within any class of Claims

will receive a pro rata distribution of the Affected Securities,4.75% of the number of such shares that the Debtors reasonablyestimate will be issued at the effective date of such 382(1)(5) Plan,as determined for U.S. federal income tax purposes. If more thanone class of the common stock or any other equity securities(including securities that are treated as equity securities for U.S.federal income tax purposes) of the reorganized Debtors (or anysuccessor), including Options (the Affected Securities), is to bedistributed pursuant to the terms of the 382(1)(5) Plan or holderswithin a class of Claims may receive a disproportionatedistribution of such securities relative to other holders in the same

class, the Applicable Percentage shall be determined by GTAT inits reasonable judgment in a manner consistent with the estimatedrange of values for the equity to be distributed reflected in thevaluation analysis set forth in the 382(1)(5) Plan and disclosurestatement, and shall be expressed in a manner that makes clear thenumber of shares or other interests in each class of AffectedSecurities that would constitute the Applicable Percentage.



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(2) Beneficial Ownership. Beneficial ownership of a Claim means:

(x) the beneficial ownership of a Claim as determined inaccordance with applicable rules under Section 382, the TreasuryRegulations promulgated thereunder, and rulings issued by the IRS(for such purpose, treating a Claim as if it is stock), and, to theextent provided in those rules from time to time, shall include (A)direct and indirect ownership (e.g., a holding company would beconsidered to beneficially own all Claims owned or acquired by itssubsidiaries), and (B) ownership by a holders family membersand any group of persons acting pursuant to a formal or informalunderstanding to make a coordinated acquisition of Claims and/orstock; and

(y) the beneficial ownership of an Option (irrespective of thepurpose for which such Option was issued, created, or acquired).

(3) Claim. A Claim means any unsecured claim under which any ofthe Debtors is the obligor, including the 2017 GT Notes and the2020 GT Notes. In making this determination, in the case of asecured claim, that portion of the claim (including such portionattributable to accrued and unpaid interest) that exceeds the currentfair market value of the security shall be considered an unsecuredClaim. In calculating the amount of any Claims under theProcedures, any applicable intercreditor agreements, includingsubordination agreements, shall be given effect in accordance withtheir terms.

(4) Entity. Entity has the meaning set forth in paragraph (b)(i)(l)above.

(5) Maximum Amount. Maximum Amount means for each personor Entity and by class or other applicable breakdown of Claims, thegreater of (A) the applicable Threshold Amount and (B) theProtected Amount (as hereinafter defined) (if any) for suchElecting Claimholder.

(6) Newly Traded Claims. Newly Traded Claims means Claims(i) with respect to which a person or Entity acquired beneficial

ownership after the date that was eighteen (18) months before thePetition Date; and (ii) that are not ordinary course claims, withinthe meaning of Treasury Regulations section 1.382- 9(d)(2)(iv), ofwhich the same person or Entity has always had beneficialownership.

(7) Option. Option has the meaning given to such term underTreasury Regulations section 1.382-4(d)(9)(i), with respect to the



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acquisition of a Claim or any consideration (including equity)distributed in respect of any Claim pursuant to a plan ofreorganization or applicable bankruptcy court order.

(8) Permitted Transferee. A Permitted Transferee with respect to anElecting Claimholder is a person or Entity whose holding of aClaim would not result in such Electing Claimholder having

beneficial ownership of such Claim.

(9) Protected Amount. Protected Amount means the amount ofClaims (by class or other applicable breakdown) of which a holderhad beneficial ownership on the Petition Date, increased by theamount of Claims of which such holder acquires, directly orindirectly, beneficial ownership pursuant to trades entered into

before the Petition Date that had not yet closed as of the PetitionDate minus the amount of Claims of which such holder sells,directly or indirectly, beneficial ownership pursuant to trades

entered into before the Petition Date that had not yet closed as ofthe Petition Date.

(10) Substantial Claimholder. A Substantial Claimholder means anyperson or Entity that beneficially owns an aggregate dollar amountof Claims against the Debtors, or any Entity controlled by such

person or Entity through which such person or Entity beneficiallyowns Claims against the Debtors, of more than the ThresholdAmount.

For the avoidance of doubt, Section 382, the Treasury Regulations

promulgated thereunder, and all relevant IRS and judicial authorityshall apply in determining whether the Claims of several personsand/or Entities must be aggregated when testing for SubstantialClaimholder status, treating Claims as if they were stock.

(11) Threshold Amount. Threshold Amount means, initially,$20,615,000, which amount may be subsequently increased ordecreased as GTAT may determine to be appropriate in the Noticeof 382(1)(5) Plan or thereafter in compliance with the Orders.

(12) 2017 GT Notes. 2017 GT Notes means the 3.00% Convertible

Senior Notes maturing October 1, 2017.

(13) 2020 GT Notes. 2020 GT Notes means the 3.00% ConvertibleSenior Notes maturing December 15, 2020.



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(c) Noncompliance with the Tr ading Procedures

Any purchase, sale, or other transfer of Claims against, or equity securities in, theDebtors in violation of the Procedures shall be null and void and shall confer norights on the transferee.

(d) GTAT s Right to Waive

GTAT may waive, in writing, any and all restrictions, stays, and notificationprocedures contained in the order approving this Motion entered by the Court.

(e) Interpretation

The Procedures are intended to preserve, to the maximum extent possible,GTATs ability to obtain the maximum benefit from its Tax Attributes and,accordingly, any interpretative question that may arise under these Proceduresshall be resolved in the manner that will reduce the risks that (a) an ownership

change may occur prior to the effective date of the Plan and (b) the Debtors maynot be entitled to employ the 382(l)(5) Safe Harbor.

BASIS FOR RELIEF

The Tax Attributes Are Property of GTATs Estates

and the Automatic Stay Bars Any Equity and Claims Transfers

That Would Diminish or Limit GTATs Interest in its Tax Attributes

20. Section 362(a) of the Bankruptcy Code operates as a stay of, among other things,

any act to obtain possession of property of the estate or of property from the estate or to

exercise control over property of the estate.6 Accordingly, where a non-debtors action with

respect to an interest that is intertwined with that of a bankrupt debtor would have the legal effect

of diminishing or eliminating property of the bankrupt estate, such action is barred by the

automatic stay.7

6 11 U.S.C. 362(a)(3).

7 Official Comm. a/Unsecured Creditors v. PSS Steamship Co. (In re Prudential Lines Inc.), 928 F.2d 565,574 (2d Cir. 1991).



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21. NOLs and other tax attributes are property of a debtors estate protected by

section 362 of the Bankruptcy Code.8 The United States Court of Appeals for the Second

Circuit, inPrudential Lines, affirmed the application of the automatic stay and upheld a

permanent injunction prohibiting a parent corporation from taking a worthless stock deduction

for the stock of its debtor subsidiary because doing so would have adversely affected the

subsidiarys ability to use its NOLs under the special relief provisions of Section 382.9 The

Second Circuit stated:

Including NOL carryforwards as property of a corporate debtorsestate is consistent with Congress intention to bring anything of

value that the debtors have into the estate. Moreover, aparamount and important goal of Chapter 11 is the rehabilitationof the debtor by offering breathing space and an opportunity torehabilitate its business and eventually generate revenue.Including the right to a NOL carryforward as property of [thedebtors] bankruptcy estate furthers the purpose of facilitating thereorganization of [the debtor].10

22. InPrudential Lines, the Second Circuit further held that the parent corporations

attempt to claim a worthless stock deduction in stock of its debtor subsidiary effectively would

8 See Nisselson v. Drew Indus., Inc. (In re White Metal Rolling & Stamping Corp.), 222 B.R. 417,424(Bankr. S.D.N.Y. 1998) (It is beyond peradventure that NOL carrybacks and carryovers are property ofthe estate of the loss corporation that generated them.), andIn re Cumberland Farms, 162 B.R. 62 (Bankr.D. Mass. 1993).

9 928 F.2d 565.

10 Id. at 573 (internal citations omitted); see also In re Fruehauf Trailer Corp., 444 F.3d 203 (3d Cir. 2006)(Property of the estate includes all interests, such as ... contingent interests and future interests, whetheror not transferable by the debtor.) (quoting Prudential Lines, 928 F.2d at 572); Gibson v. United States(In re Russell), 927 F.2d 413,417 (8th Cir. 1991) (concluding the right to carry forward the [debtors]

NOLs was a property interest of the estate); In re Delta Air Lines, Inc., Case No. 05-17923 (PCB)(Bankr. S.D.N.Y. Sept. 16, 2005) (finding that tax credit carryforwards were property of the debtorsestates and approving notification procedures and restrictions on certain transfers of claims against andinterests in the debtors to protect, among other things, $346 million in non-NOL tax credits); In re EnronCorp., Case No. 01-16034 (Bankr. S.D.N.Y. 2003) (finding that the debtors NOL carryforwards are

property of the debtors estates and are protected by the automatic stay prescribed in section 362 of theBankruptcy Code).



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eliminate the value of the debtors NOLs, and thus, would be an act to exercise control over

estate property in violation of the automatic stay extant under section 362 of the Bankruptcy

Code.11 There, the parent corporations interest in its worthless stock deduction was intertwined

with the debtors NOLs. The Second Circuit determined that, if the parent were permitted to

take a worthless stock deduction, it would have an adverse impact on the debtor subsidiarys

ability to carry forward its NOLs. Therefore, the Second Circuit noted that, despite the fact that

the [parent corporations] action is not directed specifically at [the debtor subsidiary], it is barred

by the automatic stay as an attempt to exercise control over property of the estate.12

23. The Second Circuit also held that the permanent injunction was supported by the

courts equitable powers pursuant to section 105(a) of the Bankruptcy Code, which authorizes

the court to issue any order, process, or judgment that is necessary or appropriate to carry out

the provisions of [title 11].13 Because the NOLs were valuable assets of the debtor, the Second

Circuit refused to disturb the bankruptcy courts determination that elimination of the right to

apply its NOLs to offset income on future tax returns would impede the debtors

reorganization.14

24. Similarly, inIn re Phar-Mor, Inc., the debtors moved to prohibit the transfer of

their stock that could have an adverse effect on their ability to use NOLs.15 The court held that

the NOLs qualified as property of the estate and issued an injunctive order and enforced the

11

Prudential Lines, 92812 Id.

13 Id.;see also11 U.S.C. 105(a).

14 Prudential Lines, 928 F.2d at 574.

15 In re Phar-Mor, Inc., 152 B.R. 924 (Bankr. N.D. Ohio 1993)



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automatic stay, thereby protecting the assets of the debtors estates. Significantly, the court

granted the relief requested even though the stockholders did not state any intent to sell their

stock and even though the debtors did not show that a sale was pending that would trigger the

prescribed ownership change under Section 382.16 Despite the ethereal nature of the situation,

the court observed that [w]hat is certain is that the NOL has a potential value, as yet

undetermined, which will be of benefit to creditors and will assist debtors in their reorganization

process. This asset is entitled to protection while debtors move forward toward

reorganization.17 ThePhar-Morcourt also concluded that, because the debtors were seeking to

enforce the stay, they did not have to meet the more stringent requirements for preliminary

injunctive relief:

The requirements for enforcing an automatic stay under 11 U.S.C. 362(a)(3) do not involve such factors as lack of an adequateremedy at law, or irreparable injury, or loss and a likelihood ofsuccess on the merits. The key elements for a stay . . . are theexistence of property of the estate and the enjoining of all efforts

by others to obtain possession or control of property of the estate.18

25. Restrictions on equity and claims trading to protect a debtor against the possible

loss of its NOLs are regularly applied by courts.19 These cases establish that it is well settled that

16 Id.at 927.

17 Id.(emphasis added).

18 Id.at 926 (quoting In re Golden Distribs., Inc., 122 B.R. 15, 19 (Bankr. S.D.N.Y. 1990)).

19 See, e.g., In re Sorenson Commcns, Inc., Case No. 14-10454 (BLS) (Bankr. D. Del. Mar. 26, 2014); In re

Fisker Auto. Holdings, Inc., Case No. 13-13087 (KG) (Bankr. D. Del. Dec. 13, 2013); In re Exide Techs.,Case No. 13-11482 (KJC) (Bankr. D. Del. July 11, 2013); In re Furniture Brands International, Inc., CaseNo. 13-12329 (CSS) (Bankr. D. Del. Oct. 1, 2013);In re Dex One Corp.,Case No. 13-10533 (KG)(Bankr.D. Del. Apr. 10, 2013);In re Educ. Holdings 1, Inc. (f/k/a The Princeton Review, Inc.), Case No. 13-10101(BLS) (Bankr. D. Del. Feb. 7, 2013); In re Overseas Shipholding Grp., Inc., Case No. 12-20000 (PJW)(Bankr. D. Del. Dec. 7, 2012);In re The PMI Group, Inc., Case No. 11-13730 (BLS) (Bankr. D. Del Feb. 8,2012); In re Digital Domain Media Group, Inc., Case No. 12-12568 (BLS) (Bankr. D. Del. Oct. 22, 2012);In re Lear Corporation,Case No. 09-14326 (ALG) (Bankr. S.D.N.Y. July 31, 2009); In re Source Interlink

(continued...)



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the automatic stay under section 362(a)(3) of the Bankruptcy Code stays actions that would

adversely affect a debtors tax attributes. These actions, including the trading of stock in a

debtor, may be determined to be null and voidab initio.

The Proposed Restrictions and Procedures Are Necessary

and in the Best Interests of GTAT, Its Estates, and Creditors

26. The Procedures are necessary to preserve GTATs ability to most effectively use

its Tax Attributes, which are valuable assets of GTATs estates, while providing latitude for

trading in GT Stock and Claims below specified levels and trading in Claims above specified

levels subject to the possible requirement to Sell-Down. GTATs ability to meet the

requirements of the tax laws to preserve its Tax Attributes may be seriously jeopardized unless

procedures are established to ensure that trading in GT Stock and Claims are either precluded or

closely monitored and made subject to Court approval. However, GTAT recognizes that the

trading in GT Stock and Claims below specified levels does not, at this time, pose a serious risk

to the Tax Attributes, and thus the restrictions and procedures set forth above preserve GTATs

ability to waive in writing, in appropriate circumstances, any and all restrictions, stays, and

notification procedures contained in this Motion.

27. Absent a change in ownership under Section 382 prior to the effective date of a

plan of reorganization, GTAT expects to be able to use a portion of the Tax Attributes to offset

future income realized both during and following the pendency of the bankruptcy case and to

(...continued)

Companies, Inc., Case No. 09-11424 (KG) (Bankr. D. Del. May 27, 2009); In re NewPage Corporation,Case No. 11-12804 (KG) (Bankr. D. Del. Oct. 4, 2011);In re Pacific Energy Resources LTC, Case No. 09-10785 (KJC) (Bankr. D. Del. Mar. 10, 2009); In re Constar International, Inc., Case No. 08-13432(PJW)(Bankr. D. Del. Jan. 22, 2009);In re FLYi, Inc., Case No. 05-20011 (MFW) (Bankr. D. Del. Dec. 22,2005). Because of the voluminous nature of the unreported orders cited herein, they are not annexed to thisMotion. Copies of the order are available upon request of GTATs proposed undersigned counsel,including at the hearing to consider this Motion.



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eliminate future income tax liability attributable to that income. Thus, the Tax Attributes are

valuable assets of GTATs estates and are entitled to the protection of the automatic stay.

Furthermore, because maintenance of GTATs Tax Attributes may enhance GTATs prospects

for a successful emergence from chapter 11, the exercise of this Courts equitable powers under

section 105(a) is appropriate. Although an ownership change upon an emergence from chapter

11 would also subject the remaining Tax Attributes to limitation, more liberal provisions apply in

that instance.

28. The relief requested herein is narrowly tailored to permit certain stock and Claims

trading to continue, subject only to Bankruptcy Rule 3001(e) and applicable securities, corporate,

and other laws. GTAT is here seeking only to enforce the provisions of the automatic stay in

connection with certain types of stock and Claims trading that pose a serious risk under the

Section 382 ownership change tests and to monitor (with limited circumspections) other types of

trading that potentially pose such a risk. The proposed restrictions on trading are crucial because

once an interest is transferred, the transaction arguably may not be reversible for tax purposes,

though it should be null and void under Bankruptcy Code section 362. Accordingly, once a

transfer acts to limit GTATs ability to use its Tax Attributes under Section 382, such ability may

be permanently lost. The relief requested is, therefore, critical to prevent an irrevocable loss of

GTATs use of its Tax Attributes.

29. It is in the best interests of GTAT, its estates, its creditors, and its stakeholders to

restrict stock and Claims trading that could result in a change of ownership under section 382 of

the Tax Code before the effective date of a plan of reorganization. If such a change of ownership

occurs, the valuation for determining the annual amount of useable NOLs would be very low.



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30. In addition, GTAT believes that the 382(l)(5) Safe Harbor described above may

create significant incremental benefit to GTAT following emergence from bankruptcy. Although

there can be no assurance that the 382(1)(5) Safe Harbor ultimately will be available to GTAT, it

is important that GTAT preserve the ability to take advantage of the 382(l)(5) Safe Harbor.

Because the determination of whether a creditor is qualified depends on whether such creditor

has held its Claim until the effective date of the plan of reorganization, transfers of Claims by

creditors before such date pose a threat to GTATs ability to satisfy the requirements of the

382(l)(5) Safe Harbor. Likewise, because transfers of GT Stock by or into the hands of 5%

shareholders before the effective date of the plan of reorganization could trigger an ownership

change that would impose a severe annual limitation on GTATs use of the Tax Attributes (even

if GTAT later satisfied the requirements of the 382(1)(5) Safe Harbor in connection with a

second ownership change resulting from a plan of reorganization), such pre-plan transfers pose a

threat to the post-reorganization value of the Tax Attributes. The requested relief will ensure that

GTAT has maximum flexibility to implement a plan that meets the requirements of the 382(1)(5)

Safe Harbor and thus preserves the Tax Attributes to the fullest extent.

31. Even if it is ultimately determined that the 382(1)(5) Safe Harbor is unavailable to

GTAT (or otherwise offers minimal or no incremental benefit), it is in the best interests of GTAT

and its estates to restrict equity trading that could result in an ownership change prior to

consummation of a plan of reorganization for at least two additional reasons. First, an ownership

change must occur pursuant to consummation of the plan in order for GTAT to qualify for the

other Section 382 bankruptcy relief provision- the favorable valuation rule of section 382(1)(6)

of the Tax Code. Specifically, section 382(1)(6) provides that if a corporation undergoes an

ownership change pursuant to a plan of reorganization and section 382(1)(5) does not apply



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(either because the corporation elects out of that provision or because its requirements are not

satisfied), then the appropriate value of GTAT for purposes of calculating the section 382

limitation shall reflect the increase in value of GTAT resulting from any surrender or

cancellation of creditors claims in the transaction. Generally, under Section 382, the taxable

income of a loss corporation available for offset by pre-change of ownership Tax Attributes is

annually limited to an amount equal to the long-term tax-exempt bond rate times the value of the

loss companys stock immediately prior to the time of the ownership change. Thus, assuming

the value of GTATs equity increases as a result of the plan of reorganization, section 382(1)(6)

will provide for a higher annual limitation than would result under the general rules of Section

382, and would preserve GTATs ability to use a greater portion of the Tax Attributes, to the

extent otherwise available, to offset any post-change income. Second, preventing an ownership

change prior to the effective date of a plan of reorganization also will benefit GTATs estates by

ensuring that GTAT will be able to make maximum use of the Tax Attributes to offset any

income arising prior to the effective date of the plan of reorganization, which income, may be

significant in amount.20

32. Following entry of the Proposed Order, GTAT proposes to serve the Procedures

Notice, describing the authorized trading restrictions and notification requirements on: (a) the

Office of the United States Trustee for Region 1, 1000 Elm Street, Suite 605 Manchester, NH

03101, Attn: Geraldine L. Karonis; (b) the creditors holding the 30 largest unsecured claims

against GTATs estates (on a consolidated basis); (c) the indenture trustee for the Debtors

(i) 3.00% Convertible Senior Notes due 2017, and (ii) 3.00% Convertible Senior Notes due 2020

20 26 U.S.C. 382(a).



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(collectively, the GT Notes), U.S. Bank National Association (U.S. Bank), 60 Livingston

Avenue, St. Paul, MN 55107, Attn: Hazrat R. Haniff; (d) U.S. Securities and Exchange

Commission, 100 F Street, NE, Washington, DC 20549 (the SEC); (e) any transfer agents for

GT Stock; (f) those holders of GT Stock who have filed Forms 13D and 13G with the SEC; and

(g) those parties who have formally filed requests for notice in these chapter 11 cases pursuant to

Bankruptcy Rule 2002 (collectively, the Notice Parties).

33. GTAT is requesting that upon receipt of the Procedures Notice, any transfer agent

shall send the Procedures Notice to all holders of GT Stock registered with the transfer agent.

Any registered holder shall, in turn, provide the Procedures Notice to any holder for whose

account the registered holder holds GT Stock. Any holder shall, in turn, provide the Procedures

Notice to any person or entity for whom the holder holds GT Stock. Similarly, GTAT is

requesting that upon receipt of the Procedures Notice, U.S. Bank, as Indenture Trustee of the GT

Notes shall send the Procedures Notice to all holders of GT Notes. The Procedures Notice will

be posted on the website established by GTATs claims agent, Kurtzman Carson Consultants

LLC, at http://www.kccllc.net/GTAT (the Website). The above measures constitute a

sufficient and cost-effective way of providing notice of the Procedures.

NOTICE

34. Notice of this Motion has been provided by email, facsimile, or overnight courier

to: (a) the Office of the United States Trustee for Region 1, 1000 Elm Street, Suite 605

Manchester, NH 03101, Attn: Geraldine L. Karonis; (b) the creditors holding the 30 largest

unsecured claims against GTATs estates (on a consolidated basis); (c) the indenture trustee for

the Debtors (i) 3.00% Convertible Senior Notes due 2017, and (ii) 3.00% 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,



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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.

NO PRIOR REQUEST

35. No previous request for the relief sought herein has been made by GTAT to this

or any other court.

WAIVER OF MEMORANDUM OF LAW

36. 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 6, 2014Manchester, NH

/s/ Daniel W. Sklar____________________________Daniel W. Sklar, Esq.Holly J. Barcroft, Esq.

NIXON PEABODY LLP900 Elm StreetManchester, NH 03101-2031Telephone: (603) 628-4000Facsimile: (603) 628-4040

- and -

Luc A. Despins, Esq.Andrew V. Tenzer, Esq.James T. Grogan, Esq.PAUL HASTINGS LLPPark Avenue Tower75 East 55th Street, First Floor

New York, New York 10022Telephone: (212) 318-6000Facsimile: (212) 319-4090

Proposed Co-Counsel for the Debtors and Debtors in

Possession



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EXHIBIT A

PROPOSED INTERIM ORDER



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UNITED STATES BANKRUPTCY COURT

DISTRICT OF NEW HAMPSHIRE

---------------------------------------------------------------

I n re:

GT ADVANCED TECHNOLOGIES INC.,et al.,

Debtors.1

---------------------------------------------------------------

x::::::::x

Chapter 11

Case No. 14-_______ (____)

Jointly Administered

RE: Docket Nos. ___

INTERIM ORDER, PURSUANT TO BANKRUPTCY CODE SECTIONS 105(a) AND

362, ESTABLISHING NOTIFICATION PROCEDURES AND APPROVING

RESTRICTIONS ON CERTAIN TRANSFERS OF CLAIMS AGAINST AND EQUITY

INTERESTS IN THE DEBTORSNUNC PRO TUNCTO THE PETITION DATE

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 interim order (the Interim Order) pursuant to sections 105 and 362 of the Bankruptcy Code

establishing notification procedures and approving restrictions of certain transfers of claims

against and equity interests in GTAT, all as more fully set forth in the Motion; and this Court

having jurisdiction to consider the 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 before this Court

1 The Debtors, along with the last four digits of each debtors tax identification number, as applicable, are:

GT Advanced Technologies Inc. (6749), GTAT Corporation (1760), GT Advanced Equipment HoldingLLC (8329), GT Equipment Holdings, Inc. (0040), Lindbergh Acquisition Corp. (5073), GT SapphireSystems Holding LLC (4417), GT Advanced Cz LLC (9815), GT Sapphire Systems Group LLC (5126),and GT Advanced Technologies Limited (1721). The Debtors corporate headquarters are located at 243Daniel 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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pursuant to 28 U.S.C. 1408 and 1409; and due and proper notice of the Motion having been

provided under the particular circumstances, and it appearing that no other or further notice need

be provided; 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 consideration of the First Day

Declaration; and it appearing that the relief requested in the Motion is in the best interests of

GTAT, its estates, and creditors; and upon all of the proceedings had before this Court and after

due deliberation and sufficient cause appearing therefor, it is hereby FOUND AND

DETERMINED THAT:

A. GTATS net operating loss carryforwards (NOLs) and certain other tax

attributes (together with the NOLs, the Tax Attributes), are property of GTATS estates and

are protected by section 362(a) of the Bankruptcy Code.

B. Unrestricted trading in common stock of GT (GT Stock) before GTATs

emergence from chapter 11 could severely limit GTATs ability to use the Tax Attributes for

purposes of the Internal Revenue Code of 1986, as amended (the Tax Code), as set forth in the

Motion;

C. The notification procedures and restrictions on certain transfers of GT Stock and

Claims (as defined below) are necessary and proper to preserve the Tax Attributes and are

therefore in the best interests of GTAT, its estates, and its creditors; and

D. The relief requested in the Motion is authorized on an interim basis under sections

105(a) and 362 of the Bankruptcy Code.

IT IS HEREBY ORDERED THAT:

1. The Motion is GRANTED on an interim basis.



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2. The provisions of Interim Order shall be effective,nunc pro tunc, to the Petition

Date.

3. Until further order of this Court to the contrary, any acquisition, disposition or

other transfer in violation of the restrictions set forth herein shall be null and void ab initioas an

act in violation of the automatic stay prescribed in section 362 of the Bankruptcy Code and

pursuant to this Courts equitable power prescribed in section 105(a) of the Bankruptcy Code.

4. The following procedures and restrictions shall apply to (a) trading in GT Stock,

and (b) trading in Claims against GTAT, and are approved:

(a) GT Stock Ownership, Acqui sit ion , and Di spositi on

(i) Notice of Substantial GT Stock Ownership. Any person or entity (as suchlatter term is defined in section 1.382-3(a) of the Treasury Regulations,including persons acting pursuant to a formal or informal understandingamong themselves to make a coordinated acquisition, an Entity) that

beneficially owns, at any time on or after the Petition Date, GT Stock (ashereinafter defined) in an amount sufficient to qualify such person orEntity as a Substantial Equityholder (as hereinafter defined) shall file withthe Court, and serve upon GTAT, GTATs proposed counsel, and thecounsel for any statutory committee of unsecured creditors appointed inthese cases (the Committee), a Notice of Substantial Stock Ownership (aSubstantial Ownership Notice), in the form attached as Exhibit 1 to theOrders, which describes specifically and in detail the GT Stock ownershipof such person or Entity, on or before the date that is the later of: (a) ten(10) business days after the entry of the Interim Order or the Final Order,as applicable, and (b) ten (10) business days after that person or Entityqualifies as a Substantial Equityholder. At the election of the SubstantialEquityholder, the Substantial Ownership Notice to be filed with the Court(but not such notice served upon GTAT, GTATs proposed counsel andthe Committees counsel) may be redacted to exclude the SubstantialEquity Holders taxpayer identification number and the number of sharesof GT Stock that the Substantial Equityholder beneficially owns.

(ii) Acquisition of GT Stock or Options. At least twenty (20) business daysprior to the proposed date of any transfer of equity securities (includingOptions, as hereinafter defined, to acquire such securities) that wouldresult in an increase in the amount of GT Stock beneficially owned by any

person or Entity that currently is or subsequently becomes a SubstantialEquityholder or that would result in a person or Entity becoming aSubstantial Equityholder (a Proposed Equity Acquisition Transaction),



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such person, Entity or Substantial Equityholder (a Proposed EquityTransferee) shall file with the Court, and serve upon GTAT, GTATs

proposed counsel, and the Committees counsel, a Notice of Intent toPurchase, Acquire, or Otherwise Accumulate GT Stock (an EquityAcquisition Notice), in the form annexed as Exhibit 2 to the Orders,

which describes specifically and in detail the proposed transaction inwhich GT Stock is to be acquired. At the election of the Proposed EquityTransferee, the Equity Acquisition Notice that is filed with the Court (butnot such notice served upon GTAT, GTATs proposed counsel and theCommittees counsel) may be redacted to exclude the Proposed EquityTransferees taxpayer identification number and the number of shares ofGT Stock that the Proposed Equity Transferee beneficially owns and

proposes to purchase or otherwise acquire.

(iii) Disposition of GT Stock or Options. At least twenty (20) business daysprior to the proposed date of any transfer or other disposition of equitysecurities (including Options to acquire such securities) that would resultin a decrease in the amount of GT Stock beneficially owned by aSubstantial Equityholder or that would result in a person or Entity ceasingto be a Substantial Equityholder (a Proposed Equity DispositionTransaction, and together with a Proposed Equity AcquisitionTransaction, a Proposed Equity Transaction), such person, Entity, orSubstantial Equityholder (a Proposed Equity Transferor) shall file withthe Court, and serve upon GTAT, GTATs proposed counsel, and theCommittees counsel, a Notice of Intent to Sell, Trade, or OtherwiseTransfer GT Stock (an Equity Disposition Notice, and together with anEquity Acquisition Notice, an Equity Trading Notice), in the formannexed as Exhibit 3 to the Orders, which describes specifically and indetail the proposed transaction in which GT Stock would be transferred.At the election of the Proposed Equity Transferor, the Equity Disposition

Notice that is filed with the Court (but not such notice served upon GTAT,GTATs proposed counsel and the Committees counsel) may be redactedto exclude the Proposed Equity Transferors taxpayer identificationnumber and the number of shares of GT Stock that the Proposed EquityTransferor beneficially owns and proposes to sell or otherwise transfer.

(iv) Objection Procedures. GTAT and the Committee shall have fifteen (15)business days after the filing of an Equity Trading Notice (the EquityObjection Deadline) to file with the Court and serve on a Proposed

Equity Transferee or a Proposed Equity Transferor, as the case may be, anobjection to any proposed transfer of equity securities (including Optionsto acquire such securities) described in such Equity Trading Notice on thegrounds that such transfer may adversely affect GTATs ability to utilizethe Tax Attributes (an Equity Objection) as a result of an ownershipchange under Section 382.



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(1) If GTAT or the Committee files an Equity Objection by the EquityObjection Deadline, then the Proposed Equity Transaction shallnot be effective unless approved by a final and nonappealableorder of this Court.

(2) If GTAT or the Committee do not file an Equity Objection by theEquity Objection Deadline, or if GTAT and the Committee providewritten authorization to the Proposed Equity Transferee or theProposed Equity Transferor, as the case may be, approving theProposed Equity Transaction, prior to the Equity ObjectionDeadline, then such Proposed Equity Transaction may proceedsolely as specifically described in the Equity Trading Notice.

(v) Additional Acquisitions. Any additional transaction within the scope ofparagraphs (a)(ii) or (a)(iii) above must be the subject of an additionalnotice as set forth herein with the applicable waiting period.

(vi) Definitions. For purposes of this Motion and the Proposed Order, thefollowing terms have the following meanings:

(1) Substantial Equityholder. A Substantial Equityholder is anyperson or Entity that beneficially owns, or any Entity controlled bysuch person or Entity through which such person or Entity

beneficially owns, at least 4.75% of all issued and outstandingshares of GT Stock.

(2) Beneficial Ownership. Beneficial ownership (or any variationthereof of GT Stock and Options to acquire GT Stock) shall be

determined in accordance with applicable rules under Section 382,the Treasury Regulations promulgated thereunder and rulingsissued by the Internal Revenue Service, and, thus, to the extent

provided in those rules, from time to time shall include, withoutlimitation, (A) direct and indirect ownership (e.g.,a holdingcompany would be considered to beneficially own all stock ownedor acquired by its subsidiaries), (B) ownership by a holders familymembers and any group of persons acting pursuant to a formal orinformal understanding to make a coordinated acquisition of stock,and (C) to the extent provided in Treasury Regulations section1.382-4, the ownership of an Option to acquire GT Stock.

(3) Option. An Option to acquire stock includes any contingentpurchase, warrant, convertible debt, put, stock subject to risk offorfeiture, contract to acquire stock, or similar interest regardlessof whether it is contingent or otherwise not currently exercisable.

(4) GT Stock. GT Stock shall mean all common stock of GT. Forthe avoidance of doubt, by operation of the definition of beneficial



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ownership, an owner of an Option to acquire GT Stock may betreated as the owner of such GT Stock.

(b) Trading in Claims of GTAT

(i) Notice of Substantial Claimholder Status; Notice of 382(l)(5) Plan.

(1) Any person or Entity (as such term is defined in TreasuryRegulations section 1.382-3(a), including persons acting pursuantto a formal or informal understanding among themselves to make acoordinated acquisition) that currently is or becomes a SubstantialClaimholder (as hereinafter defined) shall file with the Court andserve upon GTAT, GTATs proposed counsel, and theCommittees counsel, a notice of such status (a Notice ofSubstantial Claimholder Status), in the form annexed to theOrders as Exhibit 4, within ten (10) business days of the later of(A) the entry of the Interim Order or the Final Order, as applicable,

and (B) the date on which such person or Entity becomes aSubstantial Claimholder. At the election of the SubstantialClaimholder, the Notice of Substantial Claimholder Status that isfiled with the Court (but not the Notice of Substantial ClaimholderStatus that is served upon GTAT, GTATs proposed counsel, andthe Committees counsel) may be redacted to exclude theSubstantial Claimholders taxpayer identification number and theaggregate dollar amount of Claims (as hereinafter defined) that theSubstantial Claimholder beneficially owns.

(2) Upon filing a plan and disclosure statement that contemplates the

potential utilization of section 382(1)(5) of the Tax Code (the382(1)(5) Plan), GTAT shall (A) publish (or arrange for

publication of) a notice and provide a written notice to the NoticeParties and Electing Claimholders (each as hereinafter defined),disclosing the filing of such 382(1)(5) Plan and the potentialissuance of a Sell-Down Notice (as hereinafter defined) inconnection therewith on the website to be established by theDebtors claims and noticing agent (the Claims and NoticingAgent) and in the national edition ofThe Wall Street Journal(aNotice of 382(1)(5) Plan), (B) identify the Threshold Amount(as hereinafter defined) of Claims for status as a Substantial

Claimholder and (C) request from each Electing Claimholder(including a Deemed Electing Claimholder (as hereinafterdefined)) updated information regarding the aggregate amount ofClaims beneficially owned by such Electing Claimholder, whichupdated information shall be delivered by such ElectingClaimholder to the Debtors within ten (10) business days of receiptof the request therefor or, in the case of a Deemed Electing



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Claimholder, ten (10) business days of the date of the Notice of382(1)(5) Plan.

For the avoidance of doubt, GTAT shall have no obligation underthe Orders to provide notice to any Deemed Electing Claimholderof the matters set forth in this Paragraph (b)(i)(2), and the lack ofsuch notice shall not limit the obligation of a Deemed ElectingClaimholder to comply with the requirements of a SellDown

Notice (as hereinafter defined) or affect the application of theEquity Forfeiture Provision (as hereinafter defined) with respect tosuch Deemed Electing Claimholder.

(3) GTAT shall disclose the Threshold Amount in the Notice of382(1)(5) Plan as of the date of the Notice of 382(1)(5) Plan basedon then available information, including any change in theThreshold Amount. GTAT may adjust the Threshold Amount

based on the updated information from Electing Claimholders

pursuant to paragraph (b)(i)(2) herein. If the Threshold Amount isadjusted, GTAT shall provide a notice of such adjusted amount inthe same manner as the Notice of 382(1)(5) Plan and such noticeshall be treated as an amended Notice of 382(1)(5) Plan, therebyrequesting updated information from each Electing Claimholderand Deemed Electing Claimholder.

(ii) Advance Approval of Acquisition Provisions.

(1) Acquisition of Claims. Except as provided in paragraph (b)(v) andthe Electing Claimholder provisions in paragraph (b)(iii) herein, at

least twenty (20) business days prior to the proposed date of anytransfer of Claims that would result in (A) an increase in the dollaramount of Claims beneficially owned by a Substantial Claimholderor (B) any person or Entity becoming a Substantial Claimholder (aProposed Claims Acquisition Transaction), such person, Entity,or Substantial Claimholder (a Proposed Claims Transferee) mayfile with the Court and serve upon GTAT, GTATs proposedcounsel, and t

gtat ex parte motion

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