Kodak files for Chapter 11 bankruptcy
Kodak CEO Antonio Perez
Eastman Kodak and its U.S.-based subsidiaries filed for Chapter 11 bankruptcy protection on Jan. 19, as the company attempts to stay solvent and shift its core business from photography to digital printing.
Kodak said it “expects” to pay employee wages and benefits and continue customer programs while participating in the Chapter 11 reorganization, which it said would be completed in 2013. Kodak also obtained a $950 million, 18-month line of credit from Citigroup to allow it to continue business operations during the bankruptcy process.
The company set up a website, kodaktransforms.com, on which there's a video of CEO Antonio Perez explaining Kodak's reasons for filing for bankruptcy, which include bolstering liquidity, resolving legal liabilities and allowing for the new business model focused on Kodak's most valuable business lines.
Perez addresses business customers directly in a letter posted to the website. In it, he says that Kodak will honor pending orders and purchases, including exchanges and refunds; fully maintain warranties, rebates and other customer service programs; provide timely and reliable deliveries of purchased items; and provide retails with scheduled inventory.
The website also includes a series of FAQs for employees, retirees and consumers. In one intended for Kodak's investors, the company said it will definitely be delisted by the New York Stock Exchange (NYSE), adding that the timing of that delisting is at the discretion of the NYSE.
In response to an FAQ-page question that asks if Kodak's securities are worthless, the company declines to comment directly, but says that investors “may wish to consult a professional investment advisor with questions regarding your personal investment decisions.”
“Chapter 11 does not mean Kodak is going out of business,” he wrote. “Chapter 11 will allow us to continue normal business operations while we restructure our debt, costs and other obligations, and gives us much more flexibility to address these matters while preservinig the fundamental value of our business and operations.”
Kodak has hired Dominic DiNapoli of FTI Consulting to serve as Kodak's chief restructuring officer, the company said in the statement.
The company said on Jan. 10 it was reorganizing its business structure by aligning itself into two units to absorb the company's film and photography segment and maximize its digital and print offerings.
Kodak representatives did not immediately respond to a request for additional comment.