Kodak Files for Chapter 11

January 23, 2012 by  

Eastman Kodak has announced a voluntary chapter 11 business reorganization filing in New York’s Southern District Bankruptcy Court. The filing affects both Kodak and its American subsidiaries and is intended to improve the company’s financial position both in the US and overseas. The filing will also enable the company to capitalize on its intellectual property, sort out liabilities and pay attention to the areas of business that are doing best. In the past few years, Kodak has invested heavily in digital technologies and this part of its business generated about 75% of 2011 revenues. Print companies from St Louis to Anchorage will watch this news with interest. As part of the reorganization the company will have, subject to court approval, a credit facility worth $950m.

Kodak intends to continue to operate as a business during this period and to carry on with customer initiatives and paying wages and benefits for employees. Non-US subsidiaries are not affected by this filing. The company sees the filing as an aid to its transformation, having already closed or disposed of some of its traditional operations while increasing its digital holdings. The company now intends to look at costs.

Chairman and CEO of Kodak, Antonio M. Perez, comments: “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.”