Special Report: Kodak Bankruptcy

Kodak Files For Chapter 11 Bankruptcy

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Published: 1/19 12:37 am

Updated: 1/19 4:41 pm

	Bankruptcy Filing Doc., 31 pp., Eastman Kodak 1-19-12 (449.0KB)
	Kodak's Ch. 11 Bankruptcy Press Release (111.1KB)

Rochester, N.Y. - Just nine days after restructuring the company into two divisions, Eastman Kodak announced early Thursday morning that the company has filed for Chapter 11 bankruptcy.

The announcement was posted on the company's website at midnight.

Kodak has secured $950 million in debtor-in-possession financing from Citigroup to sustain itself with the goal of emerging from bankruptcy in 2013.

Kodak says the move was "intended to bolster liquidity in the U.S. and abroad, monetize non-strategic intellectual property, fairly resolve legacy liabilities, and enable the company to focus on its most valuable business lines."

"We are taking this step at this point in our transformation in order to build the strongest possible foundation for the Kodak of the future," said Kodak CEO and Chairman Antonio Perez in a videotaped message on Kodak's website.

The company expects to pay employee wages and benefits. They will also continue customer programs.

"We have four objectives: to provide our customers, vendors, suppliers and employees a greater measure of confidence in our position," Perez said.

Chapter 11 bankruptcy allows Kodak to restructure its debt, continue to operate, and work to emerge from bankruptcy.

Compare that to Chapter 7 bankruptcy, which forces a company to liquidate its assets and go out of business.

Kodak has also launched a new website with information on their reorganization plans. Click here to be directed to the site.

Regarding how the move will affect the Rochester, the company says on the website:

"Kodak will still be headquartered in Rochester. This is our hometown and our largest cornerstone in the U.S. and worldwide. We are proud of our long-standing history in Rochester, and our objective is to emerge as an ongoing business enterprise that is assured of long-term viability and so better able to be a vibrant member of this community and all communities of which we are a part."

On January 10, Kodak restructured into two divisions, consumer and commercial.

This month, the company has filed several lawsuits against phone companies Apple, HTC, and Samsung.

Kodak accuses the competitors of infringing on its digital patents.

What Does Bankruptcy Filing Mean to Stockholders?

Kodak stock, which closed at $0.55 on Wednesday, will be delisted from the New York Stock Exchange.

Kodak says its annual meeting for investors in February is cancelled.

It will continue to file quarterly and annual reports with the Securities and Exchange Commission.

What Does Bankruptcy Filing Mean to Employees and Retirees?

Kodak says normal business operations will continue, which includes paying salaries and benefits to employees.

Employees and retirees based in the United States can contact a hotline at (888) 249-2721 to address specific benefits and payroll questions not addressed on the website.

Kodak will evaluate its facilities and determine if any will have to close.

There are thousands of Kodak retirees who live in the Rochester area and around the country.

Eastman Kodak Retiree Association said it will take steps to protect the interests of Kodak retirees in bankruptcy proceedings.

"EKRA will file notice with The Office of the U.S. Trustee to be appointed to the committee of unsecured creditors, representing the interests of retirees who have a claim," said EKRA President Bob Volpe. "It is our intention, and our members expect us, to lead and to be their advocates in any way that will protect their pension and benefits. I want to assure retirees and their families that EKRA will work diligently with its own attorneys as well as advisors from the National Retiree’s Legislative Network (NRLN) to stand up for the interests of retirees in bankruptcy proceedings."

What Does Bankruptcy Filing Mean to Customers?

Kodak says it will continue to honor pending orders, warranties, and refunds and exchanges on Kodak products.

Deliveries will be shipped to retailers.

What Does Bankruptcy Filing Mean to Suppliers?

Under bankruptcy law, Kodak says it will be prohibited from making payments to suppliers for services or goods received prior to the filing.

Unpaid bills that preceded the Chapter 11 filing will be frozen and will be considered unsecured claims in the reorganization process.

You can call the Kodak Supplier Call Center at (800) 544-7009 or (585) 724-6100 if you have questions.

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The views expressed here do not necessarily represent those of 13WHAM-TV || Rochester

garythompson - 1/19/2012 8:06 PM

1 Vote

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This is what happens to companies who discriminate against their employees and tries to buy their way out of the situation. Justice is being served in a different manner.

lcd1212 - 1/19/2012 6:14 PM

0 Votes

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Not only is my father and grandfather turning over in their graves, but so is George Eastman. And to think Antonio Perez was nominated for President Barack Obama’s Council on Jobs and Competitiveness. Kind of ironic if I do say so myslef.

Weezer - 1/19/2012 5:57 PM

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Oh my goodness. My Grandfather would turn over in his grave. Mr Eastman, Treated his enployees, as people. Grandpa worked, 2 or three days a week in the 20s When he died they bought an urn,and a plant stand from his house, and always said that this came from Mr. Eastmans house. He died in 1969, grandma never paid health Insurence, until her death, in 1987. This yellow box needs to look at its self. Hello, you invented digital camera, in the 80s. Ya think you might need a new CEO? Im thinkin.I know you made a lot of money on film, but really, you knew cell phone picts were comming, shame on you CEO. I hope Mr. Eastman haunts you till the day you die. Thanks for running a great company under the bus. You did good for you and only you. Bless all the people that made KODAK what it is and was. If Mr. Eastman was here today I know he would take care of each and every one of you, good job, NOT YOU CEO< DUMB ASS.

wealthfor4ever - 1/19/2012 4:02 PM

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Imagine people working in this company for 20, 30 and 40 years. The thing called JOB Security is just an illusion. Guys this can happen to anybody. If you are interested in building your financial future do not depend on your JOB. Continue doing it. In the meantime if anyone is interested in having a parallel income, please contact me at wealthfor4ever@gmail.com \

the hound - 1/19/2012 3:58 PM

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Press release by lawyers. Been there. What a nightmare.

umpire1976 - 1/19/2012 11:57 AM

0 Votes

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To get this company back on track first and foremost Perez needs to go. Second and right on the heels of Perez is the Board of Directors. This BOD has given him double digit pay raises year after year and let this go on, what were they thinking?

liberals suck - 1/19/2012 11:43 AM

1 Vote

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Kodak deserves this, the employees and retirees don't. Years of bungling and management greed have ruined the company. The management has ridden the backs of the grunt on the floor while the middle stays fat. A company can not gain profits by cutting employees. The local media treats Kodak with kid gloves. Perez on Obama's Jobs council, what a joke.

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