Kodak preparing to file for bankruptcy in coming weeks
ROCHESTER — Eastman Kodak Co. is preparing for a Chapter 11 bankruptcy-protection filing in the coming weeks should efforts to sell a trove of digital patents fall through, people familiar with the matter said.
The struggling photography icon, which employs about 19,000 people, is in discussions with potential lenders for around $1 billion in so-called debtor-in possession financing that would keep it afloat during bankruptcy proceedings, the people said.
A filing could occur as soon as this month or early February, one of the people said.
A Kodak spokesman said the company “does not comment on market rumor or speculation.”
Should Kodak seek Chapter 11 protection from creditors, the company would then try to sell its portfolio of 1,100 patents through a court-supervised bankruptcy auction, the people said. Kodak would continue to pay its bills and operate normally while under bankruptcy protection, the people said.
Kodak is still making last-ditch efforts to sell the patents, which would keep the company from filing for bankruptcy protection, one of the people said. But the 131-year-old former blue chip company has started making preparations for a Chapter 11 bankruptcy filing if those efforts don’t come to fruition, the person said.
Kodak warned in a securities filing in November it will run out of cash to fund operations unless it sells its patents or is able to borrow more money.
On Tuesday, Kodak disclosed that the New York Stock Exchange warned the company it could be delisted unless its fortunes rebound in the next six months.
Kodak’s shares have closed under $1 for 30 consecutive trading days. On Wednesday they closed more than 28 percent lower.
Once a high flier, Kodak has been burning cash as it tries to transform itself from a company dependent on film sales to one built around commercial and consumer printers. The company’s problems intensified in 2011, as CEO Antonio Perez’s strategy of using patent lawsuits and licensing deals to raise cash to fund the turnaround ran dry.
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