Kodak escapes bankruptcy
Its new structure will mean a lower public profile for Kodak's iconic name and its expected revenues.
NEW YORK - 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 US 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 note holders in full.
General unsecured creditors are likely to receive a marginal pay out in the neighbourhood of 4 cents to 5 cents on the dollar.
Kodak plans to emerge from bankruptcy as early as 3 September, its attorney, Andrew Dietderich, said at a hearing in U.S. Bankruptcy Court in New York.