Eastman Kodak has gotten court approval to emerge from bankruptcy as a smaller digital imaging company, according to BBC. Kodak was originally supposed to exit bankruptcy in July. Kodak has a lot of history as they started in New York over 100 years ago. Throughout the 20th century, Kodak had a dominant position in photographic film, especially in 1976 when they had 89% market share for that market.
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Eastman Kodak Company Posts
Eastman Kodak Company is seeking a court approval for a $406 million rights offering after they emerge from Chapter 11 bankruptcy. This would give creditors a large stake in the company. Kodak’s creditors have agreed to backstop an offering that would allow the company to issue 34 million common shares worth $11.94 each. This is equal to around 85% of equity of a reorganized company, according to Reuters.
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Brother is a multinational electronics and electrical equipment company based in Japan that has acquired Kodak’s imaging business for $210 million in cash. Brother will be assuming deferred service revenue liabilities of the business, which totaled around $67 million as of December 31, 2012.
When Shutterfly acquired Kodak’s online Gallery photo business for $23.8 million last year, part of the agreement was that Kodak agreed not to set up a duplicate business. However there is a Kodak mobile application that lets users buy photo albums from pictures that are stored on Facebook called “My Kodak Moments.” As a result, Shutterfly filed a complaint with the U.S. Bankruptcy Court in Manhattan claiming that Kodak is violating the sales agreement by setting up a competing business.
Eastman Kodak Company filed for Chapter 11 bankruptcy around a year ago. The company sold off around 1,000 of their digital imaging patents last month. U.S. Bankruptcy Court Judge Allan Gropper of the Southern District of New York has approved Kodak’s $844 million financing led by Centerbridge Partners LP.
Kodak has sold around $525 million worth of patents to a consortium of companies known as Intellectual Ventures and RPX Corporation. Intellectual Ventures represents a portfolio of patents used by Apple and RPX represents a portfolio of patents for Google. The sale of the patents will help Kodak with the bankruptcy restructuring process. Kodak has been trying to sell the patents for a while and at one point they claimed Apple was intervening with the process.
Apple and Google have jointly bid on 1,100 patents that are being auctioned by Kodak. “Apple and Google learned a lesson from the Nortel’s auction. They have decided to come together in this process to reduce the cost of purchasing the Kodak patents, while meeting their business needs,” stated IP Offerings president Richard Ehrlickman. Apple and Google has faced numerous lawsuits around the iOS and Android operating systems.
As part of a massive restructure, Eastman Kodak is laying off 1,000 additional workers by the end of 2012. Kodak may have to extend those job losses before the end of the year to remain in business. About 30 years ago Kodak was employing around 145,000 employees and now that number has fallen to around 14,700. Kodak CFO Antoinette McCorvey and Kodak COO Philip Faraci recently exited the company. Kodak president Antonio Perez said: