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Kodak may soon seek bankruptcy protection. According to the Wall Street Journal, the iconic camera company is preparing to file for Chapter 11. The filing may come as early as this month or early February. The once corporate titan is still trying to avoid a bankruptcy filing. Indeed, it is making last-ditch efforts to sell off more than 1,100 patents, including patents for the technology used in digital photography.
Kodak is continuing to make preparations for a bankruptcy filing in case it is unable to obtain buyers for its patent portfolio. The company is currently talking to banks in order to obtain $1 billion in debtor-in-possession financing to sustain it through the bankruptcy proceedings. If Kodak were to file for Chapter 11, it would continue to operate normally. The main focus of the proposed filing would be to conduct a court-supervised auction of its patent portfolio. A filing would make Kodak’s sale of its patent portfolio easier and will likely result in it obtaining higher prices. Also, by filing for Chapter 11, Kodak may be able to adopt a plan that would allow it to shed some of its large obligations to retirees, including pension and health-care costs.
This proposed filing continues Kodak’s reversal of fortune. Ironically, Kodak, the company that invented the digital camera in 1975, has failed to keep pace in the digital age. While the company aggressively invested in research that yielded breakthroughs in imaging and other technologies, it was unable to capitalize off of all of its findings, including the digital camera.
Even if Kodak is able to successfully stave off a bankruptcy filing, the viability of the company will remain uncertain. In the past half-decade, under CEO Antonio Perez, the company has decided to focus on commercial and consumer printers. Thus far, the printer strategy has neither proved profitable nor successful. Indeed, if Kodak is unable to raise its share price in the next six months, it will be kicked off of the New York Stock Exchange.
Kodak’s continued downturn demonstrates the difficulty that large companies have in successfully innovating and responding to the ever-changing global market. Indeed, the company that was the Apple or Google of its day, it is only one in a long line of large companies (such as Blockbuster and Borders) to fall from grace.
– Christina Santana
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