Case: HJB Doc #: 3178 Filed: 02/26/16 Desc: Main Document Page 1 of 6 UNITED STATES BANKRUPTCY COURT DISTRICT OF NEW HAMPSHIRE

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1 Case: HJB Doc #: 3178 Filed: 02/26/16 Desc: Main Document Page 1 of 6 UNITED STATES BANKRUPTCY COURT DISTRICT OF NEW HAMPSHIRE ********************************* In re GT Advanced Technologies, Inc., et al 1, Debtors ********************************* Chapter 11 Case No HJB Jointly Administered LIMITED OBJECTION BY CHAD FERO TO DEBTROS AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 OF THE BANKRUPTCY CODE DATED FEBRUARY 1, 2016 [DOCKET NO. 2998] NOW COMES Chad Fero, an employee of the Debtor GT Advanced Technologies, Inc., by his counsel Ford & McPartlin, P.A., and respectfully objects to Debtor s Amended Plan of Reorganization Under Chapter 11 of the Bankruptcy Code, dated February 1, 2016 (hereinafter the Plan ), and in support of his objection says as follows: 1. As a preliminary matter, Mr. Fero is in essence joining in the Preliminary Objection filed by Duncan Harwood to the Plan [Docket No. 3161], and will borrow heavily from that objection. GTAT. 2. Like Mr. Harwood, Mr. Fero is, and at all relevant time was, an employee of 3. Mr. Fero was hired by GTAT on or about At that time he signed a short letter agreement which served as an employment contract dated April 12, 2006 (the letter agreement ). 1. 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 (8329), 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 (5126), and GT Advanced Technologies Limited (1721). The Debtors corporate headquarters are located at 243 Daniel Webster Highway, Merrimack, NH

2 Case: HJB Doc #: 3178 Filed: 02/26/16 Desc: Main Document Page 2 of 6 5. Contemporaneous with that, Mr. Fero was required to sign and did sign a document called GT Equipment Technologies, Inc. Employee, Non-Competition, Non- Disclosure, Propriety Information and Patent and Invention Assignment Agreement (the NDA ). 6. Like Mr. Harwood, Mr. Fero was party to a certain Restricted Stock Unit/Cash Payment Agreement dated 5/29/14 (the RSU ). 7. The only mention in Debtor s petition of any executory contract relating to Mr. Fero appears at p. 396 of Docket No. 592 (Schedule G) which lists an Employment Agreement dated 5/29/14. There is no mention on Schedule G of the 2006 employment letter agreement or the NDA. 8. To date neither the letter agreement, the RSU, the NDA, or any other document governing Mr. Fero s employment relationship with Debtor has been assumed or rejected by the Debtor. 9. Mr. Fero would contend that the letter agreement 2006, the NDA, the RSU and certain other s and documents which served to modify his employment rights and obligations are part of an integrated contract. 10. Mr. Fero objects to Section 11.1 of the Plan because it purports to assume certain some or all of the NDA piecemeal without assuming the employment agreements with which they are integrated. 11. The operative section of 11.1 is 11.1(B) which reads as follows: 11.1 Executory Contracts and Unexpired Leases Deemed Rejected (a) On the Effective Date, all of the Debtors executory contracts and unexpired leases will be deemed rejected as of the Effective Date in accordance with, and subject to, the provisions and requirements of sections 365 and 1123 of the Bankruptcy Code, except to the extent (i) the Debtors previously have assumed, assumed and assigned, or rejected with 2

3 Case: HJB Doc #: 3178 Filed: 02/26/16 Desc: Main Document Page 3 of 6 executory contract or unexpired lease, (ii) prior to the Effective Date, the Debtors have filed a motion to assume, assume and assign, or reject an executory contract or unexpired lease on which the Bankruptcy Court has not ruled, (iii) an executory contract and unexpired lease is identified in the Plan Supplement as an executory contract or unexpired lease to be assumed or assumed and assigned pursuant to the Plan, or (iv) executory contracts and unexpired leases under which the counterparty has consented to the extension of the time by which the Debtors must assume or reject to a date beyond the Effective Date. Entry of the Confirmation Order by the Bankruptcy Court shall constitute approval of all rejections of executory contracts and unexpired leases pursuant to this Section 11.1 and sections 365(a) and 1123 of the Bankruptcy Code. (b) Notwithstanding Section 11.1(a) of the Plan, to the extent (i) any Debtor is a party to any non-disclosure or confidentiality agreement, (ii) any such agreement constitutes an executory contract, and (iii) such agreement (1) has not been assumed or rejected pursuant to a Final Order of the Bankruptcy Court, (2) is not subject to a pending motion for reconsideration or appeal of an order authorizing the assumption or rejection of such executory contract, (3) has not been noticed for rejection and such notice has been served on the applicable counterparty on or prior to the Effective Date, then such agreement will be assumed as of the Effective Date by the corresponding Debtor, in accordance with the provisions and requirements of sections 365 of the Bankruptcy Code. No Cure shall be paid in connection with the assumption of such an agreement. (c) The listing of a document in the Plan Supplement shall not constitute an admission by the Debtors that such document is an executory contract or an unexpired lease or that the Debtors have any Liability thereunder. At any time before the Effective Date, the Debtors, with the consent of the Majority Financing Support Parties, may withdraw or modify the designation of any executory contract or unexpired lease for assumption or assumption and assignment. (The underlines indicate the portion Mr. Fero objects to.) 12. Confirmation of the Plan should be denied because Section 11.1 of the Plan purports to assume certain executory contracts that are not listed in Schedule G, including presumably Mr. Fero s NDA. 13. Because the NDA referred to in Section 11.1 is not listed on Schedule G, it is unclear under the Plan what contracts will be assumed. Moreover, Section 11.1 says that no cure 3

4 Case: HJB Doc #: 3178 Filed: 02/26/16 Desc: Main Document Page 4 of 6 payments will be made. This leads a party to an unnamed executory NDA with no motion to assume to respond to and no ability to demand a cure payment. 14. Such a process interferes with the affected party s rights of due process, and is contrary to Interestingly, even if the NDA had been listed in Schedule G, section 11.1(b) of the plan would still be problematic. As noted above, the full title of the NDA document is rather lengthy. It is not merely a non-compete agreement, it is not merely a non-disclosure agreement, it is not merely a confidentiality agreement. 16. The text of 11.1(b) seems to contemplate that only the non-disclosure and confidentiality obligations set out in the NDA will be assumed (as opposed to non-compete obligations). 17. Plaintiff assumes that this omission is a recognition by Debtor that rejection of the Mr. Fero s employment agreement would result in the release of any non-compete obligations which would burden him if his contract was assumed. 18. At the very least, it is not clear that even if 11.1 becomes effective, Debtor can pick and choose and only assume the non-disclosure and confidentiality parts of the NDA while rejecting the rest. 19. Finally, pursuant to 28 of the Harwood objection, Fero also objects to Debtor s attempt to assume the non-compete or non-disclosure allegations without a cure payment and without assuming the remainder of the integrated obligations. 20. Confirmation of the Plan should be denied to the extent it attempts to: (i) assume executory contracts or portions of them that are not listed on Schedule G; (ii) attempts to assume 4

5 Case: HJB Doc #: 3178 Filed: 02/26/16 Desc: Main Document Page 5 of 6 contracts without cure payments; and/or (iii) attempts to assume the benefits of integrated contracts without also assuming the duties thereof. 21. MR. FERO WILL WITHDRAW THIS LIMITED OBJECTION IF THE PLAN IS AMENDED OR THE ORDER CONFIRMING THE PLAN PROVIDES AS FOLLOWS: DEBTOR AND FERO SHALL CONCLUDE, ON OR BEFORE MARCH 25, 2016, A MUTUALLY AGREEABLE AND ENFORCEABLE AGREEMENT WITH RESPECT TO FERO S COMPENSATION, FAILING WHICH FERO SHALL BE RELEASED FROM ANY NON-COMPETE OBLIGATIONS HE CURRENTLY OWES TO ANY DEBTOR IN THIS CASE. WHEREFORE, Mr. Fero respectfully requests that this Honorable Court: A. Deny confirmation of the Plan; and B. Grant such other and further relief that this Court deems just and equitable. Respectfully submitted CHAD FERO By His Attorneys, FORD & MCPARTLIN, P.A. Dated: February 26, 2016 By: /s/ Marc W. McDonald Marc W. McDonald (BNH 01314) 10 Pleasant Street, Suite 400 Portsmouth, NH Telephone: Facsimile: mmcdonald@fordlaw.com 5

6 Case: HJB Doc #: 3178 Filed: 02/26/16 Desc: Main Document Page 6 of 6 CERTIFICATE OF SERVICE On February 26, 2016, I electronically filed this document through the CM/ECF system, which will send a notice of electronic filing to: See Exhibit A attached hereto and made a part hereof. /s/ Marc W. McDonald Marc W. McDonald f:\wpdata\marcmc\ \pleadings\objection amended plan docx 6

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