Icon will try to restructure
Eastman Kodak Co., an icon that dates back to the 1880s and the biggest supplier of raw film stock to Hollywood from the beginning of motion pictures, has filed for Chapter 11 in U.S. bankruptcy court for the Southern District of New York after struggling for years with fierce competition and shifting technology.
The Rochester, N.Y.-based company said Citigroup put out a statement just after midnight Thursday. It said it will provide a $950 million debtor-in-possession loan to allow it to operate during bankruptcy. A bankruptcy judge must approve the loan.
Sony and Warner Bros. are named in the filing among Kodak’s unsecured creditors with $16.7 million and $14.2 million in unsecured notes, respectively. For years, Hollywood was based around Kodak products. The 3,332-seat Kodak Theater, home of the Academy Awards, opened in 2001.
The problem for Kodak is the collapse of the consumer film business. The switch to digital in professional production has hurt somewhat, but that transition isn’t complete. Film remains especially popular in India and other overseas production centers, and last month Kodak execs told Variety motion picture stock is still a profitable business for the company.
“We’re still selling billions of feet of film,” said Ingrid Goodyear, VP of marketing for Kodak’s Entertainment Imaging business unit. “Right now and for the forseeable future we still see film to be an important of Kodak’s business.” Kodak’s motion picture film stock is all manufactured in Rochester, N.Y., which Goodyear said makes their operations more efficient. “Right now that business is significant, and based on the size of it it’s going to be around for a while,” she said.
A Chapter 11 filing had been expected for some months, if not years. Kodak said it will reorganize its businesses, bolster liquidity in the U.S. and abroad, sell nonstrategic intellectual property, resolve legacy liabilities and enable focus on its most valuable business lines. The company has made pioneering investments in digital, it said, generating some 75% of its revenue from digital businesses in 2011.
“Kodak is taking a significant step toward enabling our enterprise to complete its transformation,” CEO Antonio Perez said.
Kodak was founded by George Eastman, who introduced the Kodak camera in 1888. The company went on to invent film, enabling Thomas Edison to develop the motion picture camera, Brownie cameras selling for $1 and Kodachrome film.
— David S. Cohen contributed to this report.