Kodak Files for Chapter 11

Following weeks of speculation, Eastman Kodak Co. announced today that the company and its US subsidiaries had filed for Chapter 11 business reorganization in US Bankruptcy Court.

“Kodak is taking a significant step toward enabling our enterprise to complete its transformation,” said Antonio M. Perez, chairman and CEO. “At the same time as we have created our digital business, we have also already effectively exited certain traditional operations, closing 13 manufacturing plants and 130 processing labs, and reducing our workforce by 47,000 since 2003.”

Earlier this month, Kodak filed a complaint with the US International Trade Commission (ITC) claiming that Apple iPhones, iPads and iPods, as well as some HTC smartphones and tablets, infringe its patents relating to transmitting digital images. It is asking the ITC to prevent importation of the devices in question (See: Kodak Trims Units, Files Lawsuits).

Kodak has obtained a $950 million line of credit from Citigroup, subject to court approval, to enhance liquidity and working capital. The company expects to continue business operations during Chapter 11, and to continue the flow of goods and services to its customers.

The company expects to pay employee wages and benefits, and to continue customer programs. Subsidiaries outside of the US are not subject to proceedings and will honor all obligations to suppliers, whenever incurred.

Kodak expects to complete its US-based restructuring during 2013.

“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 said.