Thursday, January 19th 2012
Kodak Files for Bankruptcy Protection
Despite numerous efforts throughout the last decade, Kodak still hasn't been able to turn its business around. The once mighty imaging company has been on a downwards trend for a long time and now, in 2012, things reached critical levels as it decided to file petitions for chapter 11 business reorganization in the U.S. Bankruptcy Court for the Southern District of New York.
According to Kodak, this move will enable it to 'bolster liquidity in the U.S. and abroad, monetize non-strategic intellectual property, fairly resolve legacy liabilities' and will allow it to 'focus on its most valuable business lines'.
"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," said Antonio M. Perez, Chairman and Chief Executive Officer. "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."
To get the reorganization done, Kodak got a $950 million debtor-in-possession credit facility from Citigroup. During this endeavor, the company will continue to pay employee wages and benefits. Customer services won't be affected either.
Kodak's plan is to complete the restructuring of its US-based business in 2013.
In related news, this week Kodak also announced that it filed a complaint with the U.S. District Court for the Western District of New York, accusing Samsung Electronics of infringing five of its patents.
According to Kodak, this move will enable it to 'bolster liquidity in the U.S. and abroad, monetize non-strategic intellectual property, fairly resolve legacy liabilities' and will allow it to 'focus on its most valuable business lines'.
"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," said Antonio M. Perez, Chairman and Chief Executive Officer. "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."
To get the reorganization done, Kodak got a $950 million debtor-in-possession credit facility from Citigroup. During this endeavor, the company will continue to pay employee wages and benefits. Customer services won't be affected either.
Kodak's plan is to complete the restructuring of its US-based business in 2013.
In related news, this week Kodak also announced that it filed a complaint with the U.S. District Court for the Western District of New York, accusing Samsung Electronics of infringing five of its patents.
15 Comments on Kodak Files for Bankruptcy Protection
Been worried about Canon too. Some of their products have really felt cheaply made as the years have gone by. But then they've diversified better. They aren't just known for one type of product. Kodak was just too recognized for their film.
Samsung should do the right thing and pay up.
But now with the digital, i have to admit i wouldn't buy kodak, i would Sony or the panasonic lumix which are also quite attractive too...
Makes one wonder what was really going on in that company. How could a company with such educated people just let it all go. How could these Harvard graduate managers not see that the very technology they themselves invented and developed was the future?
I do know this...Kodak made a lot of people in Rochester, NY very well off.
I'm talking about mid to upper management personnel.
You have to see some of their many million dollar homes on East Ave. here in Rochester and many in the suburds, like Brighton, NY homes on Ambassador Rd., Sandringham Rd., etc.
Even the regular worker at Kodak made a decent living there until the 90's. I believe the average salary yearly was >40K.
I myself worked there in the 80's and made great money. And the benefit package was above and beyond anyone elses in the area. Not to mention the yearly bonus that averaged over 3K back then. And back then, 3K was a lot of money.
Such a shame to see this happen.
I know a guy that worked for Kodak as a senior engineer, and he developed a way to extract almost 100% of the gold that went into the processing for black and whites. They rewarded him for his idea by demanding the process information and firing him, then suing him.
Gotta be some bad management there somewhere.
The problem is that they got so fat and lazy and spent money like it was growing on trees. Too many people being paid too much for too little invention and innovation. They really were riding on their history and not planning, building, developing and SAVING for the future.
They "deserve" to go down, in a corporate and strategy and operational sense. I'm sorry for the individual employees who are now people (possibly) without jobs... but big picture wise, this is complete corporate mismanagement for the last 15 years. It reminds me of many "public companies" where there is no concept of performance, only "take".
Makes a nice MBA case study I guess.