News / Economy

    US Judge Approves Kodak Plan to Exit Bankruptcy

    DVD's by Eastman Kodak Co are displayed in a retail store in San Diego, California, April 22, 2013.
    DVD's by Eastman Kodak Co are displayed in a retail store in San Diego, California, April 22, 2013.
    Reuters
    Eastman Kodak Co, once a mighty photography pioneer, earned court approval on Tuesday for a plan to emerge from bankruptcy as a much smaller digital-imaging company.
     
    The green light from U.S. Bankruptcy Judge Allan Gropper in New York puts Kodak on track to exit bankruptcy in about two weeks.
     
    “It will be enormously valuable for the company to get out of Chapter 11 and hopefully begin to regain its position in the pantheon of American business,” Gropper said.
     
    Kodak, based in Rochester, New York, was for years synonymous with household cameras and family snapshots. It filed a $6.75 billion bankruptcy in January 2012, weighed down by high pension costs and a years-long delay in embracing digital camera technology.
     
    With the court approval, the company's exit from bankruptcy is now imminent, Chief Executive Antonio Perez said in a statement.
     
    “Next, we move on to emergence as a technology leader serving large and growing commercial imaging markets,” he said, adding the company will have a leaner structure and a stronger balance sheet.
     
    It has sold off assets, including its consumer-focused operations, and will emerge from Chapter 11 to focus mainly on commercial products such as high-speed digital printing technology and flexible packaging for consumer goods.
     
    Its new structure will mean a lower public profile for Kodak's iconic name and its expected revenues, about $2.5 billion, are roughly half of what it had when it filed for Chapter 11.
     
    In bankruptcy, Kodak failed to obtain significant value for its portfolio of patents, which experts said was a crucial reason it had to sell core businesses and reinvent itself. But the bankruptcy resolved a major dispute with retirees over pensions, and it has forged a restructuring plan that, while wiping out shareholders, should pay secured creditors and second-lien noteholders in full.
     
    General unsecured creditors are likely to receive a marginal payout in the neighborhood of four cents to five cents on the dollar.
     
    “This comes on a day when many are losing retirement benefits, and many are finding that their recovery as a creditor is just a minute fraction of what their debt is,” Gropper said. “But I cannot decree a larger payment for creditors or any payment for shareholders if the value is not there.”
     
    Kodak plans to emerge from bankruptcy as early as Sept. 3, its attorney, Andrew Dietderich, said at a hearing in U.S. Bankruptcy Court in New York.

    The fall of the mighty
     
    Kodak's bankruptcy capped a protracted plunge for the company, which was founded in 1880 by George Eastman, the inventor of the hand-held camera and rolled photographic film. Kodak's market value topped $31 billion in the mid-1990s.
     
    When it filed for bankruptcy, it hoped to fetch more than $2 billion for about 1,100 patents related to digital imaging. But due in part to losses in high-profile patent litigation with Apple Inc, the company was only able to sell the portfolio for about $525 million to a consortium led by Intellectual Ventures and RPX Corp.
     
    The company sought other ways to save money. In April, it resolved a crucial dispute with its British pension, which dropped a $2.8 billion claim against Kodak while buying the company's personalized imaging and document imaging businesses for $650 million.
     
    The company reached an $895 million financing deal in June with JPMorgan Chase & Co, Bank of America Corp and Barclays Plc. It also plans a $406 million rights offering, selling 34 million shares, or 85 percent of the equity in the reorganized company, with proceeds going to creditors.
     
    Shareholders fought to salvage some value from the bankruptcy, including at Tuesday's hearing, saying Kodak was undervaluing its reorganized entity. But Gropper repeatedly denied their efforts to form a committee to represent their interests, saying it was clear there would be no value for them.
     
    Gropper's patience ran out however when he admonished one shareholder for asking what he felt were overly broad questions of Kodak executives about their methodology for the company's valuation. The Canadian shareholder spent close to an hour at the podium.
     
    Cross-examination questions must be narrowly focused, Gropper said.
     
    “It's like that in Canada too, yes?” said the judge, raising his voice.
     
    Gropper later admitted he'd “been a bit impatient” with some stakeholders, calling Kodak's collapse a “tragedy of American economic life.”
     
    The case is in re: Eastman Kodak Co, U.S. Bankruptcy Court, Southern District of New York, No. 12-10202.

    You May Like

    Multimedia Obama Calls on Americans to Help the Families of Its War Dead

    In last Memorial Day of his presidency, Obama lays wreath at the Tomb of the Unknown Soldier at Arlington National Cemetery

    The Strife of the Party: Will Trump Permanently Alter Republicans?

    While billionaire mogul's no-holds-barred style, high-energy delivery are what rocketed him to nomination, they also have created rift between party elites and his supporters

    China's Education Reforms Spark Protest

    Beijing is putting a quota system in place to increase the number of students from poor regions attending universities

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Chinese-Americans Heart Trump, Bucking National Trendi
    X
    May 27, 2016 5:57 AM
    A new study conducted by three Asian-American organizations shows there are three times as many Democrats as there are Republicans among Asian-American voters, and they favor Hillary Clinton over Donald Trump. But one group, called Chinese-Americans For Trump, is going against the tide and strongly supports the business tycoon. VOA’s Elizabeth Lee caught up with them at a Trump rally and reports from Anaheim, California.
    Video

    Video Chinese-Americans Heart Trump, Bucking National Trend

    A new study conducted by three Asian-American organizations shows there are three times as many Democrats as there are Republicans among Asian-American voters, and they favor Hillary Clinton over Donald Trump. But one group, called Chinese-Americans For Trump, is going against the tide and strongly supports the business tycoon. VOA’s Elizabeth Lee caught up with them at a Trump rally and reports from Anaheim, California.
    Video

    Video Reactions to Trump's Success Polarized Abroad

    What seemed impossible less than a year ago is now almost a certainty. New York real estate mogul Donald Trump has won the number of delegates needed to secure the Republican presidential nomination. The prospect has sparked as much controversy abroad as it has in the United States. Zlatica Hoke has more.
    Video

    Video Drawings by Children in Hiroshima Show Hope and Peace

    On Friday, President Barack Obama will visit Hiroshima, Japan, the first American president to do so while in office. In August 1945, the United States dropped an atomic bomb on the city to force Japan's surrender in World War II. Although their city lay in ruins, some Hiroshima schoolchildren drew pictures of hope and peace. The former students and their drawings are now part of a documentary called “Pictures from a Hiroshima Schoolyard.” VOA's Deborah Block has the story.
    Video

    Video Vietnamese Rapper Performs for Obama

    A prominent young Vietnamese artist told President Obama said she faced roadblocks as a woman rapper, and asked the president about government support for the arts. He asked her to rap, and he even offered to provide a base beat for her. Watch what happened.
    Video

    Video Roots Run Deep for Tunisia's Dwindling Jewish Community

    This week, hundreds of Jewish pilgrims are defying terrorist threats to celebrate an ancient religious festival on the Tunisian island of Djerba. The festivities cast a spotlight on North Africa's once-vibrant Jewish population that has all but died out in recent decades. Despite rising threats of militant Islam and the country's battered economy, one of the Arab world's last Jewish communities is staying put and nurturing a new generation. VOA’s Lisa Bryant reports.
    Video

    Video Meet Your New Co-Worker: The Robot

    Increasing numbers of robots are joining the workforce, as companies scale back and more processes become automated. The latest robots are flexible and collaborative, built to work alongside humans as opposed to replacing them. VOA’s Tina Trinh looks at the next generation of automated employees helping out their human colleagues.
    Video

    Video Wheelchair Technology in Tune With Times

    Technologies for the disabled, including wheelchair technology, are advancing just as quickly as everything else in the digital age. Two new advances in wheelchairs offer improved control and a more comfortable fit. VOA's George Putic reports.
    Video

    Video Baby Boxes Offer Safe Haven for Unwanted Children

    No one knows exactly how many babies are abandoned worldwide each year. The statistic is a difficult one to determine because it is illegal in most places. Therefore unwanted babies are often hidden and left to die. But as Erika Celeste reports from Woodburn, Indiana, a new program hopes to make surrendering infants safer for everyone.
    Video

    Video California Celebration Showcases Local Wines, Balloons

    Communities in the U.S. often hold festivals to show what makes them special. In California, for example, farmers near Fresno celebrate their figs and those around Gilmore showcase their garlic. Mike O'Sullivan reports that the wine-producing region of Temecula offers local vintages in an annual festival where rides on hot-air balloons add to the excitement.
    Video

    Video US Elementary School Offers Living Science Lessons

    Zero is not a good score on a test at school. But Discovery Elementary is proud of its “net zero” rating. Net zero describes a building in which the amount of energy provided by on-site renewable sources equals the amount of energy the building uses. As Faiza Elmasry tells us, the innovative features in the building turn the school into a teaching tool, where kids can't help but learn about science and sustainability. Faith Lapidus narrates.

    Special Report

    Adrift The Invisible African Diaspora

    World Currencies

    EUR
    USD
    0.8977
    JPY
    USD
    111.18
    GBP
    USD
    0.6834
    CAD
    USD
    1.3038
    INR
    USD
    67.139

    Rates may not be current.