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Chapter 11 Bankruptcy Protection Filed by Eastman Kodak

 

The long time pioneer in photography, Eastman Kodak, has filed for Chapter 11 bankruptcy protection on January 19, 2012.

In the Chapter 11 bankruptcy protection papers filed in the U.S. Bankruptcy Court for the Southern District of New York, the company cited the advance technology of digital photography and fierce competition as the cause of their filing for reorganization.

Kodak listed $5.1 billion in assets and $6.75 billion in debt in its bankruptcy protection filing. The 131-year-old photography pioneer secured $950 million in financing from Citibank to help it stay afloat during the bankruptcy restructuring process and named Dominic Di Napoli, a vice chairman at FTI Consulting as its chief restructuring officer.

Kodak has done several cost reduction in the previous years in order to survive competition. Chairman and CEO Antonio M. Perez mentioned that they had already effectively exited certain traditional operations, closing 13 manufacturing plants and 130 processing labs, and reducing our workforce by 47,000 since 2003. He also noted that that the bankruptcy protection filing is “a necessary step and the right thing to do for the future of Kodak.”

The Chapter 11 bankruptcy protection filing had been rumored for weeks as several directors have resigned from Kodak’s board. It also announced that it realigned and simplified its business structure in an effort to cut costs, create shareholder value and accelerate its long-drawn-out digital transformation.

Chapter 11 bankruptcy protection permits company reorganization where in most cases, the debtor remains in control of its business operations as a debtor in possession, and is subject to the oversight and jurisdiction of the court.

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