Rumors have swirled for months now about the fate of Eastman Kodak Co. Perhaps there was some optimism that the company might stave off bankruptcy when it announced a leadership shakeup that saw its GC, Laura Quatela, promoted to president but, alas, it didn’t pan out. This morning, Kodak officially filed for Chapter 11 business reorganization in the U.S. Bankruptcy Court for the Southern District of New York.
Kodak announced that it has obtained $950 million in financing from Citigroup Inc. to help keep the lights on during the bankruptcy proceedings. The company adds that it expects to continue the flow of goods and services as usual, and can pay its employees’ wages and benefits without issue during this timeframe.
Kodak had hoped during the past few months that by selling off a number of its patents it would be able to avoid bankruptcy, but it concurrently had been preparing for this eventuality if it couldn’t raise sufficient capital.
“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,” Antonio Perez, Kodak’s chairman and CEO, said in a statement. “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,” Perez added.
Kodak, which has employed Dominic DiNapoli, vice chairman of FTI consulting to serve as chief restructuring officer during the Chapter 11 case, expects to complete the U.S.-based restructuring in 2013.