April 29th, 2013

Kodak Turns Over Film Division to Its UK Pension Plan

Today Eastman Kodak Company announced the transfer of its Personalized Imaging and Document Imaging businesses to the UK-based Kodak Pension Plan (KPP), its largest creditor. The deal includes Kodak’s Film Capture and Paper & Output Systems divisions, among others, and will see KPP take over responsibility for the operation of Kodak’s film business.

Kodak is giving the businesses over to KPP, the pension plan for its U.K. retirees, in order to settle $2.8 billion in claims KPP made against Kodak in bankruptcy proceedings. Kodak agreed to transfer the businesses to KPP for cash and non-cash consideration of $650 million. If the U.S. Bankruptcy Court and the UK Pensions Regulator approve the settlement, it will help pave the way for Kodak to emerge from Chapter 11. Kodak plans to focus on its Commercial Imaging business.

In a statement, Kodak Chairman and CEO Antonio M. Perez said the settlement helped Kodak clear “several key hurdles in our reorganization…. placing our Personalized Imaging and Document Imaging businesses with a new owner that recognizes their value and is focused on their growth and success, and providing the remaining liquidity we require to emerge from Chapter 11.”

According to a report in the Wall Street Journal, KPP plans to hire new executives to run the Personalized Imaging and Document Imaging businesses so they can generate cash flow for the pension plan, rather than finding a buyer for the businesses.

“The businesses that we are acquiring will deliver long-term cash flows to support the plan’s obligations,” said KPP chairman Steven Ross in a statement. “The financial stability that KPP will provide for the Personalized Imaging and Document Imaging businesses will be beneficial to those businesses’ employees, customers and partners.”

February 9th, 2012

Kodak Ceases Camera Production Amid Bankruptcy

In a statement posted on the Kodak Web Site under the title “Update on Kodak’s Transformation,” the company announced that it will cease producing digital cameras, pocket video cameras and digital picture frames “to focus its Consumer Business on desktop inkjet, online and retail-based printing—areas that offer the most significant opportunities for profitable growth. Kodak will continue to offer camera accessories and batteries, which are universally compatible with other brands,” the statement said.

According to the Wall Street Journal, “The move during the first half of the year should save more than $100 million a year, and Kodak expects to book a $30 million charge from exiting the business.”

The statement also said that it was “likely” that some of the cameras, video cameras and digital frames it announced at CES would not be launched.

Eastman Kodak Co. filed for Chapter 11 bankruptcy protection on January 19, 2012. In its filing in US Bankruptcy Court in the Southern District of New York, the company reported that it has $6.8 billion in debt and $5.1 billion in assets. Kodak has struggled for years as the photography business has moved to digital photography.

Related: Kodak Files for Bankruptcy Protection
Kodak Shares Below $1, Could Be Delisted From NYSE