Joel R. Glucksman
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201-896-7095 jglucksman@sh-law.comFirm Insights
Kodak Nears Bankruptcy Exit Following Deal with U.K. Pension Plan
Author: Joel R. Glucksman
Date: May 10, 2013
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Kodak nears bankruptcy exit following formal bankruptcy proceedings to sell its assets to a United Kingdom pension fund.
Under the terms of the agreement, photography pioneer Kodak will sell its document and personal imaging businesses to its British pension fund for $650 million in cash and non-cash assets. The pension fund would also pick up 3,200 full-time Kodak employees, USA Today reports. In return for selling the assets, the pension fund will drop its $2.8 billion claim against Kodak, currently the largest unsecured claim the company faced following its demise.
The agreement, if approved by the U.S. Bankruptcy Court of Manhattan, will pave the way for the company to emerge from bankruptcy proceedings. Lenders required that Kodak sell its document and personal imaging units for a minimum of $600 million before they would agree to extend financing for the company to exit proceedings.
“In one comprehensive transaction, Kodak will realize its previously announced intention to divest its personalized imaging and document imaging businesses and settle its largest legacy liability,” said Antonio Perez, Kodak’s chairman and chief executive, according to the New York Times.
Kodak filed for bankruptcy law protection under Chapter 11 of the Bankruptcy Code in January 2012 as more consumers turned away from roll-up film and toward the digital photography industry. Since that period, the company has been attempting to sell off its assets, and made a deal with a consortium of technology companies to sell 1,100 digital imaging patents for $525 million. However, the amount was much less than expected. Once Kodak officially emerges from proceedings, it plans to focus its attention on its commercial imaging unit, which includes graphic communication, film and specialty chemical products, Reuters reports.
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