Kodak Bankruptcy Could Be Right Around The Corner, Rumors Heat Up Again
The Eastman Kodak Co. is 131-years-old and it looks as if the company may not be around for 132. Reports are circulating in which the famous photography provider will sell of it’s assets in a last ditch effort to save the company, a move similar to an approach recently taken by Nortel who’s patent library sold for $4.5 billion. Kodak currently controls nearly 1,100 patents.
Kodak executives are also said to be in talks with various banks in the hopes of raising the $1 billion needed to keep the company in operation through their bankruptcy proceedings.
If rumors are correct the filing could happen in late January or early February, in the meantime insiders at the company say Kodak will continue to pay its bills and operate its business “as usual.”
A Kodak spokesman for Kodak says the company “does not comment on market rumor or speculation.”
What is certain is the company’s fall from grace. Kodak invented the first digital camera way back in 1975 but failed to capitalize on that success. Years later the company attempted to break out into other avenues including bathroom cleaners, medical-testing devices and various chemicals, all products that failed to launch or failed on the open market in the 1980s and 1990s.
Over the last decade the company’s biggest successes have come in the form of commercial printers, photo paper and other basic services under the leadership of CEO Antonio Perez. Unfortunately the cash flow from the Kodak consumer segment has never been enough to generate the type of money needed to turn around the company’s fortunes.
If the company is not able to find a viable market through asset sales it will leave 19,000 employees with jobs.
Highlighting the company’s fall the Wall Street Journal notes:
Such uncertainty was once unthinkable at Kodak, whose near-monopoly on film produced high margins that the company shared with its workers. On “wage dividend days,” a tradition started by Kodak founder George Eastman, the company would pay out bonuses to all workers based on its results, and employees would use the checks to buy cars and celebrate at fancy restaurants.
This isn’t the first time Kodak bankruptcy rumors have surfaced, back in Oct. 2011 our very own Kim LaCapria reported on rumored Kodak bankrupcty talks, this is what Kodak spokesman Gerard Meuchner had to say about that rumor at the time:
“As we sit here today, the company has no intention of filing, and there is no change in our strategy to monetize our intellectual property,” and “We’re not concerned about fraudulent conveyance in regards to the sale of our IP portfolio.”
Those talks sent Kodak shares plummeting.
Are you surprised to learn how far Kodak has fallen over the last 40 years?