This is no Kodak moment. The 131-year-old camera company has not been profitable since 2007 and is in talks with potential bidders for its patent portfolio, which could rake in about $3 billion, according to an estimate by MDB Capital Group.
The 1,100 patents, however, cannot be easily sold, as purchases may be considered “fraudulent transfers” if Kodak is insolvent; if so, creditors may sue for more money. Therefore, a bankruptcy filing could help clear the way for patent sales.
According to Bloomberg, the company signed confidentiality agreements with its suitors, including Google Inc., to examine assets, and discussed possible patent sales with law firms Kirkland & Ellis and Jones Day.
A statement issued by Kodak spokesman Gerard Meuchner on Friday confirmed the hiring of law firm Jones Day to help the company restructure, but also dispelled rumors of the company’s intentions to file for bankruptcy.
“Kodak is committed to meeting all of its obligations and has no intention of filing for bankruptcy,” Meuchner said. “Kodak remains focused on meeting its commitments to customers and suppliers, and on delivering on its strategy to become a profitable, sustainable digital company.”
The announcement helped the company stay afloat over the weekend, as shares recovered about 70 percent since its sharp drop after investors became uneasy about a potential bankruptcy. While the concerns of patent buyers remain, Kodak will continue to weigh its options.