Eastman Kodak Bankruptcy Snapshots Shift from Film to Digital
Eastman Kodak (NYSE:EK) and its U.S. subsidiaries filed for bankruptcy protection under Chapter 11, bringing to a head a long drawn decline in which its market capitalization fell to $150 million from $31 billion fifteen years ago. The company will see through bankruptcy proceedings with the help of a $950 million, 18-month credit line from Citigroup (NYSE:C). During this period the company will seek buyers for its hoard of 1100 digital patents, restructure debts, sell businesses and carve out a business model while maintaining payments to its workforce of 17,000.
“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,” Chairman and Chief Executive Antonio Perez said in a statement. “Now we must complete the transformation by further addressing our cost structure and effectively monetizing non-core intellectual-property assets. We look forward to working with our stakeholders to emerge a lean, world-class, digital imaging and materials science company,” he added.
Kodak had total assets of $5.1 billion and liabilities of $6.75 billion as of end September. It is being advised by investment banking firm Lazard Ltd., who is also helping locate buyers for the patents. Dominic DiNapoli, vice chairman of FTI Consulting Inc., a business turnaround specialist, will serve as chief restructuring officer.
A cloud hangs over the company’s pension liabilities which owe predominantly to retirees in Britain, a Kodak manufacturing base since 1891.