Collins Ink agreed to temporarily resume supplying ink to Kodak for use in its Versamark printer line following a meeting between lawyers for the two sides. The truce came after Kodak filed a temporary injunction in the Western District of New York to prevent Cincinnati-based Collins from cancelling the ink supply contract and moving from a supplier to Kodak of ink for the Versamark line to a competitor.
In its lawsuit against Collins, Kodak argued that after a decade in which Collins leveraged Kodak’s know-how and exclusive distributor relationship to gain control of 90% of the Versamark ink market, Collins turned around and tried to use that position to extract concessions from Kodak in regards to other business.
When that effort failed, the suit claims Collins announced that, effective immediately, it would no longer honor its existing supply and distribution contract with Kodak.
Collins president Lawrence Gamblin had indicated both in letters to Kodak and in public comments that concerns over Kodak’s financial stability played a role in the decision to attempt to end the contract and move to become a direct supplier of Versamark ink.
Such concerns were further exacerbated by reports this week that Kodak is in talks to obtain as much as $900m in rescue financing. The Wall Street Journal reported the company is looking to boost its financing while it attempts to sell more than 1,000 patents related to its digital imaging business as it looks to transition from a company largely driven by its camera and film photography to one focused on consumer and commercial printing.
The WSJ reported the new funds could be used to pay down the company’s existing senior debt, while also buying it time to negotiate a better price for its intellectual property. Kodak, which is set to report third quarter earnings next week, has seen its stock plunge in recent years from about $10 a share to its current level of $1.25 per share.
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