CHICAGO, IL, September 05, 2013 /24-7PressRelease/
-- Just over 18 months ago, Eastman Kodak, one of the most iconic and well known companies in U.S. history, filed for Chapter 11 bankruptcy
. After a long process of negotiating with creditors and attempting to alleviate the fears of shareholders, a federal bankruptcy judge in Manhattan has approved Kodak's restructuring plan. The approval is the final major step for the company to exit bankruptcy protection
Over the summer, Kodak worked with many of its major creditors to reach settlements about repayment of much of its debt. Under the approved restructuring plan
, Kodak will exit bankruptcy with the majority of its shares owned by its creditors. Overall, creditors will own 85 percent of Kodak's stock after an offering period that brought in over $400 million. Kodak's official exit from Chapter 11 is scheduled for just after Labor Day.
Nearly all of Kodak's creditors supported the restructuring plan as it was outlined. Notably, the plan was supported by both retiree groups in the U.S. and the U.K. The company's unsecured creditors were also in favor of the plan. Previously, retirees in the U.S. settled with Kodak for an unsecured amount of $635 million after the company terminated their health and pension benefits, one of the prime factors that led to the company's bankruptcy. Under the restructuring plan, retirees will have the option to purchase shares of Kodak's new common stock after the company exits bankruptcy.
In recent months, Kodak's plans to restructure have been criticized by current shareholders, who have argued that the company was attempting to hide assets and was, in fact, solvent. The federal court disagreed with them, however, and refused to set up an official committee to represent their interests. Under the approved restructuring plan, current shareholders of Kodak are wiped out.
Eastman Kodak was once one of the most recognizable company names in the world. It was, however, slow to acknowledge the importance of digital photography and bogged down by high pension costs. But experts remain optimistic that Kodak will rise to prominence once again as a more focused, streamlined organization. After it emerges from the Chapter 11 process, Kodak will focus on its commercial imaging business, which includes both digital printing and motion picture film products.
Only time will tell whether Kodak will one day become as profitable as it was before, though it appears initially as if the bankruptcy process has helped the company get a new financial start.
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