Kodak files for bankruptcy protection

In this Oct. 3, 2011 file photo, Kodak headquarters is shown in Rochester, N.Y. / AP

ROCHESTER, N.Y. - Photography icon Eastman Kodak has filed for Chapter 11 bankruptcy protection, as it seeks to boost its cash position and stay in business.

The move comes as the ailing company has failed to find a buyer for its trove of 1,100 digital imaging patents. Kodak said in November that it could run out of cash in a year if it didn't sell the patents, for which it hoped to fetch billions.

Eastman Kodak Co. said early Thursday that it has secured $950 million in financing from Citigroup Inc., and expects to be able to operate its business during bankruptcy reorganization and pay employees. The Rochester, N.Y.-based company, which was pummeled by foreign competition and then severely shaken by the digital revolution, has invested huge sums in new lines of inkjet printers that are finally on the verge of turning a profit.

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CEO Antonio Perez said in a statement that the bankruptcy filing is "a necessary step and the right thing to do for the future of Kodak."

The company and its board are being advised by Lazard, FTI Consulting Inc. and Sullivan & Cromwell LLP. Dominic DiNapoli, vice chairman of FTI Consulting, will serve as chief restructuring officer. Kodak expects to complete its U.S.-based restructuring during 2013.

On its website, Kodak assured customers that the nearly $1 billion in debtor-in-possession financing would be sufficient to pay vendors, suppliers and other business partners in full for goods and services going forward. The bankruptcy filing in the Southern District of New York does not involve Kodak's international operations.

The Chapter 11 filing had been rumored for weeks. Multiple directors have resigned from Kodak's board and the company last week 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. Since the start of the year, Kodak said it now has two business units — commercial and consumer — instead of three.

Previously, Kodak's business segments were divided into its traditional film and photo paper products, consumer digital imaging and graphic communications, which included printing equipment. Home photo printers, commercial inkjet presses, workflow software and packaging are viewed as Kodak's new core. Kodak has said it hopes the printer, software and packaging businesses will more than double in size by 2013 and account by then for 25 percent of its revenue, or nearly $2 billion.

Kodak did not announce job cuts as part of the bankruptcy protection filing. The company's payroll has plunged below 19,000 from 70,000 a decade ago.

[Samlv]

Kodak = Missed the move to digital.

They could have been Canon, or Nikon, but, nope.

This is a story very much like the steel and auto industry: fat, dumb, happy management takes the off-ramp while everyone else hits the road. Face first.

[Molly-Pchr]

sad to see these giants dying.

[bradkt1]

When...one by one...all of the great U.S. manufacturing companies are either going broke or are taking the jobs formerly held by American workers and going overseas, I submit that the real problem here is NOT the free market. I say that the real problem is the policy of the U.S. Government when it comes to looking out for American companies and workers.

The same thing is happening over and over again and it is obvious to me that the answer is very simple: American companies using American workers cannot compete with either American or foreign companies using foreign workers who receive a mere pittance of the wages and benefits that American workers receive.

Likewise, we learned the hard way in this country what the costs are to our environment if we don't protect it. Other countries don't and companies that do business in those countries don't have to bear the related costs of doing business in the U.S.

We are going to have to decide what kind of country we want to have and pass on to our heirs. Are we going to be a country of hamburger flippers? Are we going to just be a country of service industries with no manufacturing base? Sure...some new industries will come on line, but no so-called "green" industries are going to replace what we have lost and are continuing to lose.

American workers and the American people are being screwed over by these companies who are run by people who have no loyalty to the company and don't care about those employees who have made a lifetime committment to that company. These hired gun CEOs make as much as a hundred times the salary that the average worker makes at that company and then has the nerve to tell those workers that they make too much money for that company to "compete."

This is a load of bull! American politicians have been bought and paid for by these companies and their lobbyists and no one is looking out for us...unless we start doing it and throwing out these bought and paid for politicians and electing leaders that stand up for and protect American workers.

Yes, in Kodak's case, the technology changed and camera film became obsolete, but that was not the only story here. Kodak couldn't "compete" with foreign companies that came in and undercut them at every turn...

...and we just stood by and watched them go down the drain...once again.