Can Kodak find a new moment after bankruptcy?
A much smaller and commercially focused company will exit Chapter 11 next month. Losers include retirees, shareholders and creditors.
The one-time photography giant, which stumbled and failed to adapt to the advent of digital cameras, entered court protection with about 17,000 employees, but it will exit with only 8,500 workers, Bloomberg notes.
Started by George Eastman in 1888, the company boomed over the next century, inventing the Brownie camera and creating the idea of snapshot photography with the slogan, "You press the button -- we do the rest."
But Kodak sold the consumer print and photographic products during the bankruptcy, severing ties to the businesses it was best known for. Today, Kodak is only slightly larger than it was over a century ago, when it employed 5,000 people in the early 1900s.
Kodak hopes to exit bankruptcy on Sept. 3, although an attorney for the company warned that "closing is complicated," USA Today notes.
But the exit approval was far from a Kodak moment, given the overall suffering it means for retirees, shareholders and Kodak creditors.
"Many are losing their retirement benefits," U.S. Bankruptcy Court Judge Allan Gropper said during approval of the plan, USA Today notes. "Many are finding their recovery as a creditor is just a minute fraction of what their debt is from Kodak. (Kodak's) decline and bankruptcy is a tragedy of American economic life."
Kodak filed for bankruptcy in 2012, after cutting 47,000 employees since 2003 and closing 13 factories and 130 photo laboratories, Bloomberg notes.
The company stumbled as digital photography gained in popularity, despite the fact that one of its own invented the first digital camera. When engineer Steven Sasson demonstrated his prototype to Kodak's management in the 1970s, he recalled to The New York Times that their reaction was, "That's cute -- but don't tell anyone about it."
The new Kodak will need to spread its message far and wide, given the company's desire to dominate the commercial printing industry. Its plan also depends on selling $406 million of new stock.
"Next, we move on to emergence as a technology leader serving large and growing commercial imaging markets -- such as commercial printing, packaging, functional printing and professional services -- with a leaner structure and a stronger balance sheet," chief executive Antonio Perez said in a statement.
Whether Kodak can recapture some of its lost magic remains to be seen.
Follow Aimee Picchi on Twitter at @aimeepicchi.
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Don't worry the lawyers and the executives (the ones that put the company in the position of having to file bankruptcy due to their incompetence, indifference, and not wanting to keep up with the times) will be just fine. They won't see any financial harm from this. Just everyone else who helped build the company into what it is.
Any deal should include executives paying back past bonuses and maybe even some salary, as well as full loss of benefits and pensions and making them start over as well with a least some of them being out right fired on top of this. Some might not like that but I think its fair and no reason they should get by unscathed while everyone else takes a beating.
I think its time
A commerical printing and imaging company? Must be huge market out there for 12-story tall "Big Brother Hates Your Guts" or "Scr*w You" or "Go F*ck Yourself" posters.
Has anybody, especially the ones that should be feeling the least bit responsible, do any of these people have any idea of what will happen to all these tens of thousands of former retired Kodak employees when this company, like so many others, gets to walk away from its pension and health care promises and obligations?
I am VERY grateful to Anthony Perez for doing everything he could to save Kodak. Under his guidance
he and his team has put Kodak back together. Many, many, many thanks for his efforts. It is unfortunate so many had to suffer but GUESS WHAT???? Kodak doesn't sell film anymore so therefore Kodak doesn't have any money.
Do you know anyone that wants a buggy whip?
Film is not Dead.
Unless you buy a 60K large format digital camera, you cannot come close to the quality of an 8x10 or 4x5 negative.
Film will still be made under the Kodak name, but not by the actual Kodak company discussed in this article.
I believe the UK Pension group purchased or recieved the rights to manufacture the film... too bad the US pensioners are getting screwed yet again. This is why Labor Laws are important.
some posters are saying the retirees are taking the brunt wrongly.
I argue they are taking exactly what they bargained for. They decided to hitch their retirement wagon as a Pension Plan INSTEAD of a Defined Contribution plan. This is an INVESTMENT strategy....
For these pensioners, they thought the payout would be higher not having to deal with the process of dealing with their own savings/IRA/401k etc AND they believed Kodak would take care of them... SO, the pensioners were really INVESTORS looking for a future payout - IT DIDN'T COME TO THEM..
Moral of the story: (listen up all you people who want govt to get involved or to punish Kodak) -- IF YOU WANT SOMETHING DONE RIGHT, DO IT YOURSELF (manage your own retirement)
DEFINED BENEFIT = MORAL HAZARD! (any exec can promise you a dollar tomorrow for work done today)
SO start looking around at the PUBLIC sector and START TELLING your Representative the public employees should be on DEFINED CONTRIBUTION not DEFINED BENEFIT....
I see nobody could tell I was being sarcastic about my first post
hey----the people who took the hit are the ones this illustrious country always target to take the hit---
ain't America wonderful----sure make us proud to be here doesn't it------as ole George dubya would say---------
-"only in America"
hey---I got an idea !! ! ! ! lets pay bomi and all is cronies in Kodak stock
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