Kodak Files for Chapter 11 Bankruptcy

Kodak Files for Chapter 11 Bankruptcy ROCHESTER, N.Y. -- Photography icon Eastman Kodak (EK) has filed for Chapter 11 bankruptcy protection, as it seeks to boost its cash position and stay in business.

The move comes as the ailing company has failed to find a buyer for its trove of 1,100 digital imaging patents. Kodak said in November that it could run out of cash in a year if it didn't sell the patents, for which it hoped to fetch billions.

Eastman Kodak Co. said early Thursday that it has secured $950 million in financing from Citigroup (C), and expects to be able to operate its business during bankruptcy reorganization and pay employees. The Rochester, N.Y.-based company, which was pummeled by foreign competition and then severely shaken by the digital revolution, has invested huge sums in new lines of inkjet printers that are finally on the verge of turning a profit.

CEO Antonio Perez said in a statement that the bankruptcy filing is "a necessary step and the right thing to do for the future of Kodak."

The company and its board are being advised by Lazard, FTI Consulting Inc. and Sullivan & Cromwell LLP. Dominic DiNapoli, vice chairman of FTI Consulting, will serve as chief restructuring officer. Kodak expects to complete its U.S.-based restructuring during 2013.

On its website, Kodak assured customers that the nearly $1 billion in debtor-in-possession financing would be sufficient to pay vendors, suppliers and other business partners in full for goods and services going forward. The bankruptcy filing in the Southern District of New York does not involve Kodak's international operations.

The Chapter 11 filing had been rumored for weeks. Multiple directors have resigned from Kodak's board and the company last week announced that it realigned and simplified its business structure in an effort to cut costs, create shareholder value and accelerate its long-drawn-out digital transformation. Since the start of the year, Kodak said it now has two business units -- commercial and consumer -- instead of three.

Previously, Kodak's business segments were divided into its traditional film and photo paper products, consumer digital imaging and graphic communications, which included printing equipment. Home photo printers, commercial inkjet presses, workflow software and packaging are viewed as Kodak's new core. Kodak has said it hopes the printer, software and packaging businesses will more than double in size by 2013 and account by then for 25 percent of its revenue, or nearly $2 billion.

Kodak did not announce job cuts as part of the bankruptcy protection filing. The company's payroll has plunged below 19,000 from 70,000 a decade ago.

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kv37

Every organization has its life-span. Looks like its over for Kodak.

January 19 2012 at 7:12 PM Report abuse rate up rate down Reply
ppaonessa190

Like so many other companies that either fail to or refuse to accept market changes, Kodak is responsible for it's failure...plain and simple. The sad part is that thousands will/have lost their jobs and a handful of very senior top executives will walk away with monstrous golden parachutes when this is all over.

January 19 2012 at 4:01 PM Report abuse rate up rate down Reply
Hello David

It is truly a sad day in Mudville with the announcement of Kodak's bankruptcy filing. I'm not ready to discount their complete failure just yet. About a week ago I was watching a news broadcast about Kodak's involvement in a new digital tv technology that is only 1/2 inch thick. Maybe the company will be able to reinvent itself by offering new products for consumers.

January 19 2012 at 2:25 PM Report abuse rate up rate down Reply
Hello David

It is certainly a sad day in Mudville with the news of Kodak's bankruptcy filing. I for one am not giving up hope on them just yet. I was watching a news broadcast about a week ago that tells of Kodak's involvement in a digital tv that is only about 1/2 inches thick. Maybe the company will be able to re-invent itself into a new line of products.

January 19 2012 at 2:18 PM Report abuse rate up rate down Reply
enzotoy

Once again, this started in the 80's and Upper management was and is the DOWN FALL of a once great company. I still have great respect for what they once were. Thanks Ted, Steve, and the other idiots at the top of Consumer Markets, but I bet you got yours !

January 19 2012 at 2:10 PM Report abuse rate up rate down Reply
TOYS

people of the usa technology is killing jobs not overseas

January 19 2012 at 2:07 PM Report abuse rate up rate down Reply
photonme

KODAK MUST FIRE THE CEO, HE HAD DONE A POOR JOB OF RUNING THIS COMPANY.

(FORMER EMPLOYEE)

January 19 2012 at 2:02 PM Report abuse rate up rate down Reply
1 reply to photonme's comment
Ferminator

Care to elaborate on the subject?

January 19 2012 at 2:45 PM Report abuse rate up rate down Reply
AgDoc

If you don't embrace the changes in technology in your field, your decline and eventual failure is inevitable. Eastman Kodak and Border Books are just the latest two examples. Either keep up or get left behind. Hopefully they'll find a niche market until they can recover.

January 19 2012 at 1:59 PM Report abuse rate up rate down Reply
phil.smith2

Too bad for the company that had the first digital camera on the market.

January 19 2012 at 1:44 PM Report abuse +1 rate up rate down Reply
1 reply to phil.smith2's comment
cherokee

I have three of their digital cameras and none of them work now? WHY, because the cost to get them repaired in just way to high. The last one i bought is a Cannon......it has had very little wrong with it.

January 19 2012 at 3:41 PM Report abuse rate up rate down Reply
mokasank2

Most movies are still shot on Kodak 35mm film. Bet most people didn't know that. Film is better than HD.

January 19 2012 at 1:44 PM Report abuse +1 rate up rate down Reply
1 reply to mokasank2's comment
cherokee

I agree with you on the film vs HD. With a high quality film you capture things that Digital just does not catch. As digital gets better and better they may, some day, get to where high quality film is now.

January 19 2012 at 3:39 PM Report abuse rate up rate down Reply