Make us your home page
Instagram

Kodak faces tough choices in bankruptcy, experts say

CHICAGO — Even in bankruptcy, Kodak boasts some enviable strengths: a golden brand, technology firepower that includes a rich collection of photo patents, and more than $4 billion in annual sales of digital cameras, printers and inks.

But all that may not be enough to revive its declining fortunes in a Chapter 11 overhaul. Kodak is at a crossroads: It could go the way of fallen Montgomery Ward and Circuit City, which never recovered from long declines. Or Kodak could prosper after bankruptcy, as General Motors has.

None of the restructuring experts interviewed by the Associated Press seemed optimistic that Kodak will make a strong comeback. Selling select business lines and patents and making the right bets on a limited number of new technology products could allow the Eastman Kodak Co. to survive, several experts said. But none envisioned a path back to anything close to the glory days of the former photography titan.

"The Kodak as we know it is done, unequivocally," said Bill Brandt, chief executive of turnaround consultant Development Specialists in Chicago.

The company's only hope, Brandt said, is to reinvent itself as an intellectual property company. But first it would have to put its patents up for sale and determine whether it wants to sell them based on what's offered, he said, or retain them and try to remake the company over a period of years.

Kodak said only that it has appointed a chief restructuring officer to head the effort: Dominic DiNapoli, vice president of FTI Consulting.

Some experts think the company can get by once it cuts debt by reducing pension and employee benefit costs in bankruptcy, then disposes of its least valuable products.

Only a much leaner, more focused Kodak can survive, said Haresh Sapra, an accounting professor and bankruptcy specialist at the University of Chicago Booth School of Business. He said Kodak "probably should go back to basics and focus on one or two of those business lines that are self-sustaining."

The primary hope lies in digital businesses that generated some $4.5 billion in revenue last year, an amount Kodak said accounted for about 75 percent of total sales. That includes consumer devices such as self-service photo kiosks, printers and high-volume document scanners.

"If they can take their existing products and improve them and make them much cheaper, I see no reason why the company can't emerge with a healthier balance sheet," said Edward Neiger, a partner at New York bankruptcy law firm Neiger LLP. "It's going to be a shell of what the old company was, but I don't think they need to liquidate."

Restructuring deadline

The Eastman Kodak Co. has until Feb. 15, 2013, to reshape its money-losing businesses and deliver a get-out-of-bankruptcy plan. Girded by a $950 million financing deal with Citigroup, the photography pioneer aims to keep operating normally during bankruptcy while it peddles a trove of digital-imaging patents. U.S. Bankruptcy Judge Allan Gropper in New York also set a June 30 deadline for Kodak to seek his approval of bidding procedures for the sale of 1,100 patents that analysts estimate could fetch at least $2 billion.

Kodak faces tough choices in bankruptcy, experts say 01/20/12 [Last modified: Friday, January 20, 2012 9:27pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Associated Press.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. Airbag maker Takata bankruptcy filing expected in Japan, U.S.

    Corporate

    DETROIT — Japanese airbag maker Takata Corp. has filed for bankruptcy protection in Tokyo and the U.S., overwhelmed by lawsuits and recall costs related to its production of faulty air bag inflators.

  2. Federal agencies demand records from SeaWorld theme park

    Tourism

    ORLANDO — Two federal agencies are reportedly demanding financial records from SeaWorld.

    Killer whales Ikaika and Corky participate in behaviors commonly done in the wild during SeaWorld's Killer Whale educational presentation in this photo from Jan. 9. SeaWorld has been subpoenaed by two federal agencies for comments that executives and the company made in August 2014 about the impact from the "Blackfish" documentary. 
[Nelvin C. Cepeda/San Diego Union-Tribune/TNS]
  3. Legalized medical marijuana signed into law by Rick Scott

    State Roundup

    TALLAHASSEE — Gov. Rick Scott on Friday signed into law a broader medical marijuana system for the state, following through on a promise he made earlier this month.

    Gov. Rick Scott signed legislation on Friday that legalizes medical marijuana in Florida.
  4. Line of moms welcome Once Upon A Child to Carrollwood

    Business

    CARROLLWOOD — Strollers of all shapes and sizes are lined up in front of the store, and inside, there are racks of children's clothing in every color of the rainbow.

    At Once Upon A Child, you often as many baby strollers outside as you find baby furniture and accessories. It recently opened this location in Carrollwood. Photo by Danielle Hauser
  5. Pastries N Chaat brings North India cuisine to North Tampa

    Business

    TAMPA — Pastries N Chaat, a new restaurant offering Indian street food, opened this week near the University of South Florida.

    The menu at Pastries N Chaat includes a large variety of Biriyani, an entree owners say is beloved by millions. Photo courtesy of Pastries N Chaat.