Kodak files for bankruptcy

Kodak has struggled in recent weeks to avoid bankruptcy but could not avoid their fate. The image technology giant has filed a petition in New York’s bankruptcy court.

However, the U.S. Company is well stacked under the protection from Chapter 11 of American bankruptcy law in order to monetizing their business.

Eastman Kodak is now seeking to strengthen their liquidity situation in U.S. and abroad. It has been rumoured that they will return to operations on intellectual property strategy, resolve the status of their liabilities and focus on more competitive business.

The Board of Directors, which is headed by Antonio Perez, believes that these steps are necessary to ensure a bright future of the firm.

The company has a reported credit of $ 950 million with Citigroup which has to be paid in 18 months time, enough to improve their liquidity crisis. The line of credit, however, is now subject to court’s approval.

Despite the bankruptcy, Kodak has sufficient capacity to continue operating and serving customers as usual. Thus, the company intends to pay historical debts and salaries to continue customer programs.

Rumours of the plight of the former photography giant began in September 2010 when there was talk of debt restructuring. The problems accelerated after the warning from NYSE to expel the organization if their shares do not trade above the dollar mark as
the market demands. At that time the company’s shares had been closing below that price for 30 days.

Rumours of bankruptcy, published by The Wall Street Journal, which published a video titled "Is it near the end of Kodak?" – Also did not contribute to improve their plight. Moody’s and Fitch have downgraded the company’s debt to junk bond level.

On January 11 Kodak managed to lift their head on Wall Street by announcing the reorganization of its business and filing a lawsuit against Apple and HTC for violating four of its patents for image processing.

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Posted by Awais Khan on Jan 19 2012. Filed under Sci-Tech. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry