October 3, 2011
STAFF & WIRE REPORTS - Confirmation by Eastman Kodak (EK.N) that it has retained the law firm Jones Day, well-known for handling bankruptcy protection cases, led to speculation that the company is planning on filing for bankruptcy protection.
News of Eastman Kodak's hiring of Jones Day sent shares of the company plummeting 54 percent on Friday. Because of the shift of photography buffs to digital cameras, Kodak has not made a profit since 2007 and there are fears about the future of the 131-year-old company.
Eastman Kodak insisted it is exploring all its options as the company transforms itself to adapt to the digital age. Last week it announced plans to borrow $160 million for general corporate purposes.
Talks of a possible bankruptcy were fueled by concerns raised by possible buyers of the company's patent portfolio.
Eastman Kodak spokesman Gerard Meuchner doused on Sunday speculations that it would file for bankruptcy protection and monetizing its intellectual property. As proof of company's financial status, Meuchner said Kodak will make a $14 million coupon payment due Monday. He said Kodak is focused on the fourth quarter and to make the company a profitable, sustainable digital company.
Reports said that a number of interested buyers of Eastman Kodak digital imaging patents, such as Google, have signed confidentiality agreements to examine the camera firm's assets. If the sale was deemed fraudulent, creditors may sue Kodak for more money. Experts said a bankruptcy filing would pave the way for a patent sale, expected to raise about $3 billion.
Kodak shares was down 91 cents to 78 cents on Sunday in New York. It was the biggest drop since 1974.