Despite numerous attempts to debunk Kodak bankruptcy rumors, it seems as though the company is now admitting that they are, in fact, considering Chapter 11. Eastman Kodak was a front runner in photography and related technology for the past decade, but is now on the verge of filing for bankruptcy to avoid financial ruin and the final closing of operations.
A Snapshot Of The Future
After significant hits to their film product line with the invention of digital cameras, the company has been wavering around financial troubles for the last ten years. It is reported that Kodak owes nearly $160 million to creditors after losing close to $2 billion in the last four years. The company is now looking for a $1 billion in debtor-in possession financing as part of their Chapter 11 case, which would allow operations to continue while Kodak works to get its finances in order.
The Chapter 11 filing comes as good news to the company’s 19,000 employees, whose jobs should be protected in bankruptcy court. However, outlook is grim for Kodak share holders as the company seeks to sell much of its 1100 patents in an auction. Originally hoped the auction would help the company avoid bankruptcy, it is becoming more clear that the auction will be necessary even if bankruptcy was to be avoided. Another option being tossed around is to enter into a joint venture with the intellectual property rather than sell it off completely through the auction. For now, the final details of the bankruptcy are unclear and only time will tell if the court intervention was successful in staving off financial ruin.