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On Tuesday, U.S. Bankruptcy Judge Allan Gropper in New York approved the plans of Eastman Kodak Co. to exit bankruptcy.
Once the pride of America and the envy of the world, this company which pioneered photography and photographic materials had faced the brunt of technological developments in recent times and the onslaught of digital photography harder than others. In 2012, Kodak filed a $6.75 billion bankruptcy brought about by its delay in beginning digital photography development, and high pension costs.
Judge Gropper said, “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.
Kodak’s Chief Executive, Antonio Perez said in a statement that the exit from bankruptcy would be soon and “Next, we move on to emergence as a technology leader serving large and growing commercial imaging markets.” He also mentioned that the company would have a better balance sheet and a more optimized organization.
To emerge from bankruptcy, Kodak has sold off most of its assets, but kept those related to high-speed digital printing technology and flexible packaging for consumer goods.
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When Kodak failed to obtain any reasonable bid for its enormous portfolio of patents, it sold of its core business of consumer focused operations, and decided to reinvent itself. The bankruptcy helped to resolve issues with retirees and develop a reasonable restructuring plan that would pay secured creditors, while shareholders would receive almost nothing – or maybe something like 4 to 5 cents on the dollar.
Gropper said the approval of the plan to exit from bankruptcy for the company, “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 what their debt is … But I cannot decree a larger payment for creditors or any payment for shareholders if the value is not there.”
