The pride of inventor George Eastman and the maker of the Brownie, Instamatic, and Kodak Camera is again in transformation. The Eastman Kodak Company and its U.S.subsidiaries filed for Chapter 11 Reorganization on January 19, 2012. The case will progress through the U.S. Bankruptcy Court for the District of New York with Kodak as the debtor-in-possession.
Rochester, New York, the center of Kodak’s commercial activities for almost 133 years, still has about 7,000 Kodak employees and 25,000 retirees. The workers in Rochesterplus Kodak’s remaining 12,000 employees are understandably concerned about their financial futures.
Sorry, No Brownie Points…
Kodak had been offering its catalogue of digital imaging patents for sale in 2011 but did not find a buyer. Unable to turn over its digital intellectual property before the end of the year, Kodak simply ran out of cash.
Kodak no longer produces film cameras. And although the company had a competitive digital camera edge early on, it opted to hold digital camera production to ensure long-term stability of its film manufacturing. All that did was allow competitors to sweep the digital camera market and, in the end, Kodak completely lost its competitive camera edge. To make matters worse for Kodak, its line of digital cameras have been losing money in part because of the picture-taking ability of the now ubiquitous cell phone and smartphone.
Taking a Shot at Inkjet Printers, Software and Packaging
Kodak’s competitive future now rides on its new home inkjet photo printers, commercial inkjet presses, Kodak software and package printing lines – by 2013 Kodak expects this group to make up almost $2 billion, or 25%, of its revenue. Good old-fashioned film, disposable cameras, photo papers and chemicals for processing still make up the bulk of Kodak’s products. Can Kodak make money on its printers and presses when competition in the marketplace from Epson, Canon, and Hewlett Packard is already fierce?
The Beat Goes On at Kodak
Kodak and its subsidiaries will continue operations as usual, uninterrupted during the Chapter 11 process. Employees will continue to get paid and receive benefits. Customer programs will go forward unabated. All post-petition obligations to suppliers will proceed in the ordinary course of business. Citigroup is backing Kodak with $950 million in secured financing, $650 million of which has already been court-approved in the interim. This should allow Kodak to keeps its shutters open while making payroll during the bankruptcy reorganization.
Which Kodak Subsidiaries Filed?
In addition to the Eastman Kodak Company, voluntary bankruptcy petitions were filed by Qualex Inc., Pakon Inc., NPEC Inc., Laser-Pacific Media Corp., Kodak Realty Inc., Kodak Portuguesa Ltd., Kodak Imaging Network Inc., Kodak Aviation Leasing LLC, Kodak Americas Ltd, Kodak (Near East) Inc.,FPCInc., Far East Development Ltd., Eastman Kodak International Capital Company Inc., and Creo Manufacturing America LLC.
Call (480) 745-1770 or fill out our contact form to get help from compassionate professionals. Stop worry and get help today.