Kodak Files For Bankruptcy amid Digital Revolution

Kodak used to be one of the strongest brands on the photo camera market, but its current position is very slippery, enough so that it had to file for Chapter 11 Bankruptcy.

It appears that Kodak simply did not move fast enough to catch the digital camera and camcorder trend, ending up in a precarious financial position.

The company has been struggling for a while now, unable to move away from film-based photography fast enough.

The company has now filed for Chapter 11 bankruptcy, a process through which it hopes to transform its business, restructure its debt and basically be reborn.

“Chapter 11 gives us the best opportunities to maximize the value in two critical parts of our technology portfolio: our digital capture patents, which are essential for a wide range of mobile and other consumer electronic devices that capture digital images and have generated over $3 billion of licensing revenues since 2003; and our breakthrough printing and deposition technologies, which give Kodak a competitive advantage in our growing digital businessess,” says Antonio M. Perez, chairman and chief executive officer.

In addition to the bankruptcy filing, Kodak has organized a $950m of debtor-in-possession credit with Citigroup, as part of an 18-month deal.

The company also hopes to score some royalties in the lawsuit it has recently started against Apple.

Either way, the corporation will have its work cut out for it until the bankruptcy process concludes, in 2013. At least it will be able to keep selling existing product ranges and honor warranties/refunds.

“Kodak is taking a significant step toward enabling our enterprise to complete its transformation,” Perez states.

“At the same time as we have created our digital business, we have also already effectively exited certain traditional operations, closing 13 manufacturing plants and 130 processing labs, and reducing our workforce by 47,000 since 2003. Now we must complete the transformation by further addressing our cost structure and effectively monetizing non-core IP assets. We look forward to working with our stakeholders to emerge a lean, world-class, digital imaging and materials science company.”