GT Advanced Technologies holds Apple, once its biggest and only major client, responsible for its liquidity crisis, citing "oppressive and burdensome" terms of contract with the iPhone maker in a court document filed by GT Advanced seeking to terminate its agreement with Apple.

The news of the sapphire glass manufacturer's bankruptcy is becoming more and more like a soap opera. On Monday, GT Advanced filed for Chapter 11 protection before the Bankruptcy Court of the District of New Hampshire. It appeared before the court on Thursday to request permission for the winding down of its sapphire crystal operations and the non-disclosure of the terms of contract with Apple, requests that Judge Henry Boroff granted. GT Advanced says it could face a risk of paying $50 million in damages per disclosure.

On Friday, GT filed a separate document asking the court to nullify its agreement with Apple, saying that the "costs of continuing to perform under the agreements constitute an unnecessary drain on GTAT's resources." Lawyers for the sapphire crystal manufacturer say GT Advanced has an unsustainable cash burn of $1 million every day, and it must wind down its operations in its facilities in Mesa, Arizona and Salem, Massachusetts and lay off 890 employees. The company is also requesting the court to grant incentive payments worth $64,700 to 13 employees who will assist in the shutdown.

"The agreements imposed oppressive and burdensome terms and obligations on GTAT," says (pdf) the company in public documents. "GTAT has determined that the Agreements are no longer necessary for GTAT's business operations. The Agreements also are not a source of potential value for GTAT's future operations, creditors, or interest holders."

GT Advanced is also seeking to preserve its right to pursue Apple in legal court in the future, saying it "believes that it has many claims against Apple arising out of its business relationship with Apple." However, the company remains mum on the specific terms and conditions that GT Advanced calls "oppressive and burdensome."

"Absent express direction from the court, GTAT cannot take the risk that it may become subject to substantial liquidated damages claims by Apple for breach of its confidentiality agreement," says the company.

All this comes just less than a year after GT Advanced announced a $578 million financing agreement with Apple to manufacture sapphire glass displays exclusively for Apple's iPhone 6 displays, but which Cupertino was not obligated by contract to buy. Apple had already paid the first installment of $439 million to GT Advanced but had withheld the remaining $139 million reportedly because GT Advanced failed to meet certain standards.

"We could speculate that some milestone or other requirement laid out in the operative documents has been broken or become the topic of a dispute between the parties," says analyst Kevin Starke at CRT Capital.

An insider working for Apple said the company pushed to help the sapphire maker meet its targets, although analysts believe Apple later decided against sapphire glass in favor of the Corning Gorilla Glass now seen on the new iPhone 6, a decision that landed the ultimate blow to GT Advanced, which was solely dependent on Apple for its business.

Apple, which has a reputation for driving hard bargains, is not exactly known for playing nice with its suppliers. In 2011, the company invested $1 billion in an LCD factory in Japan to manufacture displays for the iPhone 4, but when sales did not meet expectations, Sharp Corp., which operated the facility, had to halt production temporarily.

But suppliers consider Apple as the ultimate resume builder, and many are willing to take the risks of supplying exclusively for the world's wealthiest company to experience the potential rewards.

"Having an exclusive factory for one customer means you don't have the same reassurance as producing parts in response to demand," one person familiar with Sharp's plans tells CNBC. "The volume [produced by Apple] is very high so it can bring the factory to 99 percent of capacity, but if there are no orders then the factory will lie idle."

Asked for comment, Apple spokesperson Kristin Huguet directed reporters to its statement released earlier:

"We are focused on preserving jobs in Arizona following GT's surprising decision and we will continue to work with state and local officials as we consider our next steps."

Meanwhile, GT Advanced executives are facing a separate class-action lawsuit filed by Gainey McKenna & Egleston on behalf of investors for making "materially false and misleading" statements that "artificially inflated the price of GTAT common stock and operated as a fraud or deceit." The lawsuit names GT Advanced CEO Thomas Gutierrez, former chief financial officer Richard Gaynor and chief financial officer Kanwardev Raja Singh Bal as defendants for allegedly misrepresenting the company's cash position and expected revenues. 

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