WSJ: Eastman Kodak readying bankruptcy filing

Posted:
in General Discussion edited January 2014
A new report has rung an early death knell for once-mighty photography pioneer Eastman Kodak, claiming that the company is preparing a bankruptcy protection filing in case it is unable to sell off its digital imaging patents.



People familiar with the matter told The Wall Street Journal that Kodak could submit the Chapter 11 request as soon as this month or early February. Under bankruptcy protection, the company would reportedly continue to operate while a court would undertake efforts to auction off a set of 1,100 patents.



Those 1,100 patents have become a beacon of hope for the former photography giant, which still has 19,000 employees. Kodak revealed last July that it was shopping its collection of digital imaging patents around in order to shore up cash for a turnaround. Chief Executive Officer Antonio Perez said in August that a number of people had expressed interest in the portfolio.



Insiders said Kodak had unsuccessfully petitioned hedge funds to borrow money to stay afloat while waiting for the patents to sell. The company has also reportedly talked to banks about $1 billion in financing that it would need during bankruptcy proceedings.



Kodak had originally hoped for a settlement of more than $1 billion in royalties from Apple and Research in Motion by way of a lawsuit with the International Trade Commission. However, a final ruling for that suit has been delayed until September 2012.



At this point, however, it's not clear whether Kodak will survive until next September. The company had just $862 million in reserves at the end of the third quarter of 2011 after losing $222 million during the period. For his part, Perez projected that Kodak would round out the fourth quarter with $1.4 billion in the bank.



One analysis from last August valued Kodak's digital imaging patents at $3 billion. At the time, the portfolio was worth more than five times the company's market capitalization. But, in the wake of the Journal's report on Wednesday, shares of the company fell more than 28 percent, leaving Kodak's market cap at just $126.88 million. Five years ago, the stock was worth over $25, a far cry from its current value of $0.47.



Kodak's decline has drawn comparisons to other companies that floundered during the transition to the digital age. The report noted the fates of Polaroid, Borders and Blockbuster, all of which were unable to adapt to new business models.



Former employees said Kodak was the Apple or Google of its time. "We had this self-imposed opinion of ourselves that we could do anything, that we were undefeatable," said Robert Shanebrook, the company's former worldwide product manager for professional photographic film.



As sales of film dried up, Perez attempted to pivot the company to focus on printers and printer ink. However, Kodak has consistently lost money under his leadership and has achieved just a 2.6 percent share of the printer market.
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Comments

  • Reply 1 of 57
    tallest skiltallest skil Posts: 43,399member
    Buy the patents that you like, Apple. Oh, and snap up that light field camera company and start a ninth technology revolution, this time in photography.
  • Reply 2 of 57
    gqbgqb Posts: 1,934member
    Chapter 11 or 13?
  • Reply 3 of 57
    bsenkabsenka Posts: 799member
    Quote:
    Originally Posted by Tallest Skil View Post


    Buy the patents that you like, Apple. Oh, and snap up that light field camera company and start a ninth technology revolution, this time in photography.



    The Creo division too. Apple should have bought that from Scitex in the first place!
  • Reply 4 of 57
    nofeernofeer Posts: 2,422member
    makes no sense

    why bid on patents when you could save big bucks by just buying the company or 51%



    and save 2.8 billion dollars



    hmmmm maybe the patents aren't relevant anymore???

    oops big price drop

    how management can destroy a company, etc nokia, rim kodak, aol, amazing



    where are the company boards to protect against massive theft of value



    just amazing
  • Reply 5 of 57
    solipsismxsolipsismx Posts: 19,566member
    Quote:
    Originally Posted by NOFEER View Post


    makes no sense

    why bid on patents when you could save big bucks by just buying the company or 51%



    and save 2.8 billion dollars



    hmmmm maybe the patents aren't relevant anymore???

    oops big price drop

    how management can destroy a company, etc nokia, rim kodak, aol, amazing



    where are the company boards to protect against massive theft of value



    just amazing



    Kodak is in the red more than $6 billion.
  • Reply 6 of 57
    jd_in_sbjd_in_sb Posts: 1,483member
    Kodak came out with one of the very first personal digital cameras. I owned the Kodak DC-40 in 1996. They had a window there to dominate the digital camera market. Not sure why they didn't.
  • Reply 7 of 57
    stourquestourque Posts: 354member
    Just wondering what 19,000 people do at Kodak? Take out the retail stores and that's more than Apple!
  • Reply 8 of 57
    Time to make them an offer they can't refuse.
  • Reply 9 of 57
    jlanddjlandd Posts: 873member
    "As sales of film dried up, Perez attempted to pivot the company to focus on printers and printer ink. However, Kodak has consistently lost money under his leadership and has achieved just a 2.6 percent share of the printer market."



    I had no idea of that, and that's insanely ironic, as I had always been happy with every Kodak product I ever bought until I gave the ESP7 printer a shot. A complete joke. Went through three of them. From the poor quality of output to the random dying of the printhead to the clueless support in India reading to me off the same horrible FAQ I read a hundred times. It actually did save on ink, but that's because it was always on the fritz. And as a bonus, it made scans that required 15 minutes in Photoshop to look like the original.



    They turned their attention towards printers? Really? Who was guiding THAT ship?
  • Reply 10 of 57
    tk_tk_ Posts: 2member
    Quote:
    Originally Posted by bsenka View Post


    The Creo division too. Apple should have bought that from Scitex in the first place!



    What in the world would Apple have done with Creo??? Creo hasn't gotten Kodak anywhere since the acquisition other than deeper into another dieing market (print). One of Apple's strengths in recent times is the ability to focus its ability in very few areas. Kodak on the other hand is all over the place which has been killing them ever since the decline of film.
  • Reply 11 of 57
    Quote:
    Originally Posted by jlandd View Post


    They turned their attention towards printers? Really? Who was guiding THAT ship?



    Kodak CEO Antonio Perez (who happened to spend 5 years as HP's President and CEO of inkjet imaging business).



    http://www.kodak.com/ek/US/en/About_...io_M_Perez.htm
  • Reply 12 of 57
    Quote:
    Originally Posted by GQB View Post


    Chapter 11 or 13?



    Chapter 11, reorganization. Assuming it happens. If they go Chapter 11, the September deadline is likely meaningless as the court has the power to stave off creditors for as long as it takes. In fact if they would runout of operating cash before they could raise the cash they need to go forward, then Chapter 11 is exactly what they need and is the reason for them to do it. However... in bankruptcy all common stock equity is typically wiped out.
  • Reply 13 of 57
    Quote:
    Originally Posted by SpamSandwich View Post


    Time to make them an offer they can't refuse.



    Probably too late, see above. Unless someone could engineer a friendly takeover in a hurry, anyone interested in Kodak's assets will soon be making their offers to the bankruptcy court.
  • Reply 14 of 57
    Looks like February will be a "kodak moment" ba dum tsch.



    Guess that's the end of that phrase
  • Reply 15 of 57
    Kodak is dead. They will end up just like The Sharper Image. Tons of crap tech sold under a license.

    You'll find plenty of Kodak s*** at TJ Maxx real soon.
  • Reply 16 of 57
    kolchakkolchak Posts: 1,398member
    Bunch of youngsters around here, it seems. Proves the axiom yet again that the one thing jaded Americans like more than a rags to riches story is a riches to rags story. This is actually a sad time. It wasn't that long ago when the name Kodak was synonymous with photography. It's stunning how they could have gone so wrong. Only twenty years ago, not only were they dominant in film photography, they were cutting-edge pioneers in digital photography. The first professional digital camera back came from them, as did some of the first consumer digital cameras, although I was very leery of paying over $1000 for mere 640x480 resolution. Still, I like to remember the salad days of the company, with their Super 8 movie cameras, Instamatics and their memorable commercials, including the one that brought us Paul Anka's "Times of Your Life."
  • Reply 17 of 57
    curtb2curtb2 Posts: 10member
    It wasn't even 20 years ago, more like 7-8 they were the leading developer of the digital processing units, professional grade cameras used.

    Sadly, all this digital revolution has done to the concept of professional photography is kill it. Camera prices are at all time high's, they change the "Professional" standard every 2-3 years... no one can afford to keep up with it... The publishing industry has been driven into the toilet also. It's insane. Heck National Geographic is struggling... as for main stream media, there is only so far you can run buying the cheapest stock photo's available.

    with the death of media, dies the artists who made the media what it was.

    This is more than a company dyeing. It's an entire industry, top to bottom.

    sadly, this digital revolution, which started with such promise, has evolved into the fast road to the lowest common denominator. unfortunately that denominator is nothingness.
  • Reply 18 of 57
    asciiascii Posts: 5,941member
    We are in the middle of the "digital disruption" that everyone thought was happening in the late 90s, only this time it's real. Lots of industries being replaced.
  • Reply 19 of 57
    Quote:
    Originally Posted by CurtB2 View Post


    It wasn't even 20 years ago, more like 7-8 they were the leading developer of the digital processing units, professional grade cameras used.

    Sadly, all this digital revolution has done to the concept of professional photography is kill it. Camera prices are at all time high's, they change the "Professional" standard every 2-3 years... no one can afford to keep up with it... The publishing industry has been driven into the toilet also. It's insane. Heck National Geographic is struggling... as for main stream media, there is only so far you can run buying the cheapest stock photo's available.

    with the death of media, dies the artists who made the media what it was.

    This is more than a company dyeing. It's an entire industry, top to bottom.

    sadly, this digital revolution, which started with such promise, has evolved into the fast road to the lowest common denominator. unfortunately that denominator is nothingness.



    The same goes for filmmaking, literature, art, music... that's just capitalism.



    Also, the denominator can't really be nothingness. That would make it undefined.
  • Reply 20 of 57
    Very tragic. Kodak is/was a huge benefactor to RIT when I was there taking a minor in photography.

    They helped pay for many of the darkrooms that we got to "play" in. It was a wonderful time, and I hate to see it happen. Rochester was once so reliant on Kodak and Xerox. So many Americans grew up using Kodak cameras as their first camera. I personally had a wonderful little camera called the "Instamatic" It was maybe the first point and shoot? I just hope that Kodak can pull off some sort of miracle at the last moment. I would bet that even today Kodak film is still the best on the market I tried others in my Nikons, but they just weren't as good or as forgiving. They my go under, but they will never be forgotten by legions of RIT students.
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