121-year-old photo company Eastman Kodak is getting a new lease on life now that a New York court has approved the recovery plan. However, the ‘new’ company will not be comparable at all to the former producer of cameras and film and it will end its life as retailer.
Missed the digital revolution
Having missed the digitisation of photography by a mile, Eastman Kodak was dangling on the edge of bankruptcy. With 5 billion euro in debt, compared to 3.8 billion worth in possessions, Kodak merely survived because of Chapter 11, a procedure which grants temporary protection from creditors.
Having its plan approved, Kodak can now dream of a new start even though it had to get rid of its retailing activity – comprising the well-known cameras and films. Half a billion euro worth of trademarks and printing technology focused on businesses should propel Kodak forward once more.
Huge debt reshuffling
Ahuge debt reshuffling was required for Kodak to get its recovery plan approved. Creditors will not get more than five percent of their claim, while the rest of it will be transformed into stock of the ‘new’ Kodak. Whoever had stock in the old company, now no longer has any rights.
Not only the creditors and shareholders are losing out, all employees have lost a large part of their pension claims and health care rights. The court decision also means that Kodak will lose all protection from creditors as of the third of September.