Film Pioneer Kodak Reaches Settlement to Exit Bankruptcy Court

By John Clark
Several months after filing for bankruptcy, Eastman Kodak Co., the iconic film company, says it has reached a bankruptcy settlement deal, according to a report from Reuters.
The company told sources this week that it will receive $895 million in financing from three Wall Street banks that have pledged to guide the camera company into its new business model.
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Kodak Appears Ready to Exit Bankruptcy Court
According to reports, Kodak plans to leave bankruptcy court with a long term loan worth $695 million, courtesy of JP Morgan Chase, Bank of America, and Barclays.
In addition to the massive loan, Kodak will also receive an asset-based revolving credit line of $200 million from the three banks, sources report.
In addition to the extra funding from the banks, Kodak is also looking to sell intellectual property, such as patents on camera technology, for millions of dollars, and to sell 85 percent of the equity in the company.
And while the company is optimistic about its chances of gaining approval for the loans, and the sale of several assets, sources note that the deal must still be approved by the U.S. Bankruptcy Court in Manhattan.
If the deal is approved, Kodak plans to use the extra cash to pay off some of the loans that funded its bankruptcy, which shows just how complicated corporate bankruptcies can become.
But the company also plans to use the money to fund its business expenses. After it leaves bankruptcy court, which is expected to happen within the next few months, Kodak is looking to rebrand itself as a commercial imaging business, according to sources.
Shift in Technology Forced Kodak to File for Bankruptcy
While it looks to enter the field of commercial imaging, Kodak is entering a whole new realm, as it gained fame for allowing regular consumers to take and produce their own images.
But the rapid shift in digital technology over the past two decades made Polaroids obsolete, as Americans quickly turned to digital cameras for their photography needs.
When Kodak’s revenues started to shrink, it found itself unable to keep up with its high pension costs, which led to the decision to file for bankruptcy in January 2012, according to reports.
Kodak, however, remains hopeful for the future. If it is able to sell its rights, it will likely repay its most senior creditors, which would solve a number of problems.
And while the company has sold many of its assets already, it still has a wealth of assets to move in an effort to maintain its vitality.