Eastman Kodak is attempting to draw its bankruptcy saga to a close. A deal has reportedly been reached with bondholders for $793 million in loans and other debts that could conceivably extract it from bankruptcy proceedings. A key point to the deal is Kodak being required to sell its digital photography patent portfolio for at least $500 million.
Despite the hearing with the bankruptcy court judge in September closing down the patent auction, Kodak continues discussions with a “supergroup” of bidders that include Apple, Google, Microsoft, Intellectual Ventures Management LLC, and RPX Corp. Kodak must sell the patents by the end of the year to meet the criteria for the loans. Kodak’s board of directors convened Sunday night to approve the financing, but bankruptcy court Judge Allan Gropper ultimately has the final say.
Bondholders providing new financing to the company include JP Morgan, UBS AG, Centerbridge Partners, and GSO Capital Partners. The bankrupt film and camera pioneer has laid off 1,000 workers since August, and more job losses may be necessary to stay afloat, especially considering the auction failure. Kodak’s workforce has fallen to approximately 14,700 from a peak of 145,000 some 30 years ago.
The cost-savings expected from the layoffs, the patent auction, and the sale of business assets were originally intended to generate billions of dollars to continue operations through its restructuring period. The new round of financing for the company is expected to buoy the company for some time as it continues to shed more dead weight and return to profitability.
