After reports circulated for weeks about the dire financial situation at Kodak, the company has today announced that it has sought out bankruptcy protection. In Chapter 11 documents filed at the US Bankruptcy Court in Manhattan, Kodak listed assets of $5.1 billion and debt of $6.8 billion.
"The board of directors and the entire senior management team unanimously believe that this is a necessary step and the right thing to do for the future of Kodak," says Kodak chairman and CEO Antonio M. Perez.
In recent months the seriousness of Kodak's financial situation has become apparent, with the company scrambling to sell off its digital patents to raise some last-minute capital. However these efforts were not enough, it seems, to keep one of America's best-known companies afloat.
The 130-year-old photographic film pioneer has managed to secure a $950 million, 18-month credit facility from Citigroup. The loan may give Kodak the time it needs to find remaining buyers for some of its 1,100 patents, and to restructure its organization while continuing to pay its 17,000 workers.
The Globe and Mail says in an article today: "Kodak once dominated its industry [...] but it failed to embrace more modern technologies quickly enough, such as the digital camera - ironically, a product it even invented."
In the last 15 years, Kodak's market value has plummeted from $31 billion down to $150 million.
Since 2003 Kodak has closed 13 manufacturing plants and 130 processing laboratories, and cut its workforce by 47,000.
"In recent years, Chief Executive Perez has steered Kodak's focus more toward consumer and commercial printers," notes today's article in the Vancouver Sun. "But that failed to restore annual profitability, something Kodak has not seen since 2007, or arrest a cash drain that has made it difficult for Kodak to meet its substantial pension and other benefits obligations to its workers and retirees."
