[News] Kodak Officially Files Chapter 11 Bankruptcy

As much as we've all been hoping there must be some way for Kodak to save itself, today marks the beginning of...a new beginning. Credited for bringing photography to the masses and creating the industry's leading film technology, we're sad for Kodak's continuing struggle. At least, however, there is hope: Kodak does expect to be completed with restructuring in 2013. Read the press release below.

January 19, 2012 12:22 AM Eastern Time
Eastman Kodak Company and Its U.S. Subsidiaries Commence Voluntary Chapter 11 Business Reorganization

Flow of Goods and Services to Customers to Continue Globally in Ordinary Course

Non-U.S. Subsidiaries Are Not Included in U.S. Filing and Are Not Subject to Court Supervision

Company Secures $950 million in Debtor-in-Possession Financing in U.S.

Kodak's Reorganization to Facilitate Emergence as Profitable and Sustainable Enterprise

ROCHESTER, N.Y.--(BUSINESS WIRE)--Eastman Kodak Company ("Kodak" or the "Company") announced today that it and its U.S. subsidiaries filed voluntary petitions for chapter 11 business reorganization in the U.S. Bankruptcy Court for the Southern District of New York.

"Our goal is to maximize value for stakeholders, including our employees, retirees, creditors, and pension trustees. We are also committed to working with our valued customers."

The business reorganization is intended to bolster liquidity in the U.S. and abroad, monetize non-strategic intellectual property, fairly resolve legacy liabilities, and enable the Company to focus on its most valuable business lines. The Company has made pioneering investments in digital and materials deposition technologies in recent years, generating approximately 75% of its revenue from digital businesses in 2011.

Kodak has obtained a fully-committed, $950 million debtor-in-possession credit facility with an 18-month maturity from Citigroup to enhance liquidity and working capital. The credit facility is subject to Court approval and other conditions precedent. The Company believes that it has sufficient liquidity to operate its business during chapter 11, and to continue the flow of goods and services to its customers in the ordinary course.

Kodak expects to pay employee wages and benefits and continue customer programs. Subsidiaries outside of the U.S. are not subject to proceedings and will honor all obligations to suppliers, whenever incurred. Kodak and its U.S. subsidiaries will honor all post-petition obligations to suppliers in the ordinary course.

"Kodak is taking a significant step toward enabling our enterprise to complete its transformation," said Antonio M. Perez, Chairman and Chief Executive Officer. "At the same time as we have created our digital business, we have also already effectively exited certain traditional operations, closing 13 manufacturing plants and 130 processing labs, and reducing our workforce by 47,000 since 2003. Now we must complete the transformation by further addressing our cost structure and effectively monetizing non-core IP assets. We look forward to working with our stakeholders to emerge a lean, world-class, digital imaging and materials science company."

"After considering the advantages of chapter 11 at this time, the Board of Directors and the entire senior management team unanimously believe that this is a necessary step and the right thing to do for the future of Kodak," Mr. Perez continued. "Our goal is to maximize value for stakeholders, including our employees, retirees, creditors, and pension trustees. We are also committed to working with our valued customers.

"Chapter 11 gives us the best opportunities to maximize the value in two critical parts of our technology portfolio: our digital capture patents, which are essential for a wide range of mobile and other consumer electronic devices that capture digital images and have generated over $3 billion of licensing revenues since 2003; and our breakthrough printing and deposition technologies, which give Kodak a competitive advantage in our growing digital businesses."

Mr. Perez concluded, "The Board of Directors, the senior management team and I would like to underscore our appreciation for the hard work and loyalty of our employees. Kodak exemplifies a culture of collaboration and innovation. Our employees embody that culture and are essential to our future success."

Kodak has taken this step after preliminary discussions with key constituencies and intends to work toward a consensual reorganization in the best interests of its stakeholders. Kodak expects to complete its U.S.-based restructuring during 2013.

The Company and its Board of Directors are being advised by Lazard, FTI Consulting Inc. and Sullivan & Cromwell LLP. In addition, Dominic DiNapoli, Vice Chairman of FTI Consulting, will serve as Chief Restructuring Officer to support the management team as to restructuring matters during the chapter 11 case.

More information about Kodak's Chapter 11 filing is available on the Internet at www.kodaktransforms.com. Information for suppliers and vendors is available at (800) 544-7009 or (585) 724-6100.

Kodak will be filing monthly operating reports with the Bankruptcy Court and also plans to post these monthly operating reports on the Investor Relations section of Kodak.com. The Company will continue to file quarterly and annual reports with the Securities and Exchange Commission, which will also be available in the Investor Relations section of Kodak.com.

Posted In: 
Log in or register to post comments

12 Comments

Patrick Hall's picture

This hurts a little more than it should.  I guess buying that stock a few months ago wasn't a great idea after all :/

Lee Morris's picture

Anyone know what will happen to my Kodak stock if another company eventually buys them out? 

Seshan's picture

It depends on how they are bought out, You may get cash for what the stock is worth or you may get shares in the company that buys them.

Ahh you beat me to it.

You'll generally be issued new shares in the purchasing company based on the purchased company's valuation.... that's the incredibly simplistic explanation. There are tons of variables, so you could walk away with virtually nothing, or if Kodak emerges from chapter 11 successfully, and their stock rebounds, for instance if they win some of their current patent litigation, you might not take a complete bath. 

It's heavily dependent on how their restructuring is arranged. Hope this helps.

Jerrit Pruyn's picture

If you had them in paper you could frame them and sell them in a couple years but yeah that electronic stock shiiiiitt probably isn't going anywhere for a while... I guess apple could buy it for the patents..

Interesting you mentioned Apple: Kodak is suing Fujifilm and Apple according to an article posted this morning. Here's a link:
http://news.yahoo.com/kodak-sues-fujifilm-stock-slumps-221019823.html

Jerrit Pruyn's picture

yeah I had heard a couple days ago that they were suing. If you can't beat them buy them. 

I live in Rochester, NY and I love Kodak the way one may love a girlfriend who drives one crazy. I hope she does well, whether I'm still with her or not.

vasco Said's picture

now who is going to make the paper for printing photos?? where are we going to buy film for my dad's old camera?? =/

Seshan's picture

Kodak isn't closing down they are filling for chapter 11, which is restructuring, they will still be making film and paper most likely. 

Ralph Hightower's picture

I hope that their film and paper products continue. I haven't gone digital yet.