Eastman Kodak Co, which invented the hand-held camera and helped bring the world the first pictures from the moon, has filed for bankruptcy protection, capping a prolonged plunge for one of the US’ best-known companies.
The more than 130-year-old photographic film pioneer, which had tried to restructure to become a seller of consumer products like cameras, said it had also obtained a US$950 million, 18-month credit facility from Citigroup to keep it going.
The loan and bankruptcy protection from US trade creditors may give Kodak the time it needs to find buyers for some of its 1,100 digital patents, the key to its remaining value, and to reshape its business while continuing to pay its 17,000 workers.
“The board of directors and the entire senior management team unanimously believe that this is a necessary step and the right thing to do for the future of Kodak,” Kodak chairman and chief executive Antonio Perez said in a statement.
“Now we must complete the transformation by further addressing our cost structure and effectively monetizing non-core -intellectual-property assets. We look forward to working with our stakeholders to emerge a lean, world-class, digital imaging and materials science company,” he added.
At the end of September, the group had total assets of US$5.1 billion and liabilities of US$6.75 billion.
However, that failed to restore annual profitability, something Kodak has not seen since 2007, or arrest a cash drain that has made it difficult for Kodak to meet its pension and other benefits obligations to its workers and retirees.
Kodak said it and its US -subsidiaries had filed for Chapter 11 business reorganization in the US Bankruptcy Court for the Southern District of New York. Non-US subsidiaries were not covered by the filing and would continue to honor all obligations to their suppliers, it added.
Kodak once dominated the camera industry and its film was the subject of a popular Paul Simon song, but it failed to embrace more modern technologies quickly enough, such as the digital camera — -ironically, a product it invented.
Its downfall hit its Rust Belt hometown of Rochester, New York, with employment there falling to about 7,000 from more than 60,000 in Kodak’s heyday.
Its market value has sunk to below US$150 million from US$31 billion 15 years ago.
In recent years, Perez has steered Kodak’s focus more toward -consumer and commercial printers.
Perez said bankruptcy protection would enable Kodak to -continue to work to maximize the value of its technology assets, such as digital-imaging patents it says are used in virtually every modern digital camera, smartphone and tablet. The company has also built up patented printing technology.
Kodak said it was being advised by investment bank Lazard Ltd, which has been helping Kodak look for a buyer for its digital patents.
Other advisers included -business--turnaround specialist FTI Consulting Inc, whose vice chairman, Dominic DiNapoli, would serve as chief restructuring officer for Kodak, supporting existing management.
In the last few years, Kodak has used extensive litigation against rivals such as Apple Inc, BlackBerry maker Research in Motion Ltd and Taiwan’s HTC Corp over those patents as a means to try to generate revenue. Those patents may now be sold through the bankruptcy process.