Eastman Kodak Files for Chapter 11 Bankruptcy Protection
January 19, 2012 9:40 AM
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Kodak expects to complete its restructuring in 2013, and the filing will not affect non-U.S. subsidiaries
predicted earlier this month
, Eastman Kodak announced early Thursday morning that it had filed for Chapter 11 bankruptcy protection.
The 131-year-old film giant filed in the federal bankruptcy court in the Southern District of New York. The filing, which only includes Kodak's U.S. subsidiaries, listed assets of $5.1 billion and debts of $6.75 billion.
Kodak had said back in November 2011 that it would be unable to pay its bills at some point in 2012 unless it stumbled into some quick cash. The company needed at least $500 million to stay afloat through the year, and it tried to
sell its portfolio of 1,100 digital imaging patents
in order to raise some cash, but was unsuccessful in doing so.
"Kodak is taking a significant step toward enabling our enterprise to complete its transformation," said Antonio M. Perez, chairman and chief executive officer of Kodak. "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. 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."
Kodak said it expects to continue operating normally while in Chapter 11, including offering goods and services to customers while continuing to provide employees with usual wages and benefits.
Kodak, which received a $950 million debtor-in-possession from Citigroup in order to provide the company liquidity to operate normally during bankruptcy, aims to focus on four main goals while undergoing Chapter 11: receive financing needed to stay in business, the ability to pursue patent infringement claims, focus on the printing business (because that's where the area of growth is, according to Perez), and change its legacy costs to a "fairer level."
"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," said Perez.
Kodak expects to complete its restructuring in 2013. The bankruptcy filing will not affect non-U.S. subsidiaries. Kodak is also expected to announce its Q4 2011 and full-year financial results on January 26.
The Wall Street Journal
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Dang, this is sad :(
1/19/2012 3:19:19 PM
Obviously I've know for years that this could be a dangerous time for Kodak. I REALLY hate to see anything happen to them-I mean I love film, I've never had any issues with them. I even think their digital cameras are supposed to be just fine, and are one of the brands I'll consider.
I just hope they can survive...
RE: Dang, this is sad :(
1/19/2012 3:26:14 PM
They will survive, at least short term, no thanks to their management.
Kodak executives failed to see the writing on the wall, in the early days of digital photography, and has been behind the curve since then. They actually DO make a good quality camera, so long as you do some research, and don't just buy the lowest cost unit you can find (mine is a 10MP compact that will easily fit in a shirt pocket, and shoots 720p quality videos too, powered by a rechargeable/removeable lithium battery).
One thing that I hope will happen during this restructuring is some of the old school executives being put out to pasture, and some new/fresh blood brought in, with their new/fresh ideas. Kodak can survive, if properly led into the future.
RE: Dang, this is sad :(
1/19/2012 6:25:15 PM
Kodak has been addicted to the revenue from its film business and not injecting enough into its digital business to be relevant. It's the same story over and over with companies and industries clinging to their current business model in a changing world.
Kodak today...RIM tomorrow.
RE: Dang, this is sad :(
2/16/2012 3:02:40 AM
did u see the crap kodak makes??
handheld video? u can just use ur mobile phone now and the gopro.. lmao they could have been a gopro
seriously printing only? competition against HP who also makes computers
5B asset with 6B debt, the ceo is stupid, with that kind of capital and resources to make even I know what should be made to make the most money and I didn't even take business!
I just know what we should have but doesn't exist
"I'd be pissed too, but you didn't have to go all Minority Report on his ass!" -- Jon Stewart on police raiding Gizmodo editor Jason Chen's home
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