Rochester, NY -- Despite their denials and protestations, Kodak announced in a release dated January 19, 2012 that it would indeed be filing for Chapter 11 bankruptcy. The release in its entirety can be viewed here.
To begin the process of reorganizing their business, Kodak was able to get Citigroup to finance the transition for $950 million. It is important to note that this only focuses on Kodak’s U.S. operations. Their non-U.S. based subsidiaries are not part of the claim. Kodak predicts that the transformation will be complete by the end of next year. During this period, all employee wages and benefits will continue to be paid as normal.
CEO Antonio Perez remains optimistic that this will help Kodak to “‘complete its transformation’” and “‘emerge a lean, world-class, digital imaging and materials science company’”. Perez also reported that this move was wholly endorsed by the Board of Directors at Kodak as well as by the senior management team. It was viewed as necessary for the future of Kodak.
The Wall Street Journal predicted on January 6th that Kodak would file for bankruptcy soon, and here is the confirmation. Their re-organization last week proved to not be enough to prevent this from occurring. Despite what looks to be a good 4th quarter of 2011 (the earnings will be reported on Jan. 26), the previous quarters of poor financial results seem to have proved to be too much. We’ll keep you updated on Kodak’s future, and will be curious to see what the new Kodak will look like and what that will mean for their printers and ink.
