New York - Eastman Kodak Company, the photography icon that invented the hand-held camera, has filed for bankruptcy protection and plans to shrink significantly, capping a prolonged plunge for one of America's best-known companies.
The Chapter 11 filing makes Kodak one of the biggest corporate casualties of the digital age, after it failed to quickly embrace more modern technologies such as the digital camera - ironically, a product it invented.
Kodak once dominated its industry, and its film was the subject of a popular 1973 song, “Kodachrome,” by Paul Simon.
The bankruptcy may give Kodak, which traces its roots to 1880, the ability to find buyers for some of its 1 100 digital patents, a major portion of its value. Kodak now employs 17 000 people worldwide, down from 63 900 just nine years ago.
“It is a very sad day even though we had anticipated it,” said Shannon Cross, an analyst at Cross Research who has had a “sell” rating on the company since 2001. “If it emerges, it will be a much smaller entity.”
According to papers filed with the US bankruptcy court in Manhattan, Kodak had about $5.1-billion of assets and $6.75-billion of liabilities at the end of September.
In court documents, Chief Financial Officer Antoinette McCorvey said, without elaborating, that Kodak plans to sell “significant assets” during the bankruptcy. Non-US units are not part of the Chapter 11 case.
Kodak also said it obtained a $950-million, 18-month credit line from Citigroup so it can keep operating and avoid having to liquidate. It said it expects to complete the bankruptcy process in 2013.
“This is a necessary step and the right thing to do for the future of Kodak,” Chairman and Chief Executive Antonio Perez said in a statement on Thursday.
Kodak's market value has sunk well below $200-million from $31-billion 15 years ago, when its share price topped $94.
The shares began trading on Thursday on the Pink Sheets. By the end of the day they were down 6 cents at 30 cents each. - Reuters