Perez says Kodak has entered Chapter 11 for four main reasons: first in order to provide confidence to its customers, vendors, suppliers and staff; second to pursue its legal claims against the likes of Apple, Fujifilm, HTC and Samsung; third to enable the company to sort out its legacy costs; and finally to allow it to continue to invest in new business opportunities.
Perez outlined that since 2004 the company has spent $3.4bn on restructuring itself, with 47,000 redundancies, 13 factory closures and 134 labs shut down. It has also raised $3bn in licence revenue in that time, but the global meltdown in 2008-10 coupled with what Perez says is a strategy of litigation delay by companies Kodak is suing, has severely affected cashflow.
The message form Perez is business as usual, with the $650m just secured from Citigroup ensuring the company’s short term future. He says that international subsidiaries such as the Australian business are unaffected, and that Kodak will be paying its bills in full, continuing to deliver products and services, and paying staff.
Local managing director Adrian Fleming in common with all other local Kodak chiefs is unable to comment on the current situation, pointing journalists to the official Kodak spokespeople in the US.
The Chapter 11 move is only applicable to the US businesses, the Australian and other overseas arms are unaffected. Chapter 11 is effectively a vehicle to enable a company to keep trading through short term cash flow problems, it is not the same as administration that manroland for example is in where the company is handed over to a court appointee whose job is to sell the company either as a whole or in parts. Goss is perhaps the best known print industry business to have entered Chapter 11 and exited successfully, Continental Airlines would be another well known US name to have gone through the process
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