Eastman Kodak has finally bitten the bullet and filed for bankruptcy protection after years of falling sales and dwindling liquidity.
According to a press release issued Thursday, Kodak and its U.S. subsidiaries filed voluntary petitions for bankruptcy protection and business reorganization proceedings at the U.S. Bankruptcy Court for the Southern District of New York today. The reorganization is intended to bolster liquidity in the United States and abroad, monetize non-strategic intellectual property (IP), fairly resolve legacy liabilities and enable the company to focus on its most valuable business lines, it stated.
The ailing imaging giant had also obtained US$950 million debtor-in-possession credit from Citigroup, which was speculated about earlier, to enhance liquidity and working capital, subject to court approval, it added.
"The board of directors and the entire senior management team unanimously believe that this is a necessary step and the right thing to do for the future of Kodak," said Antonio Perez, chairman and CEO of Kodak, in a statement. "Kodak is taking a significant step toward enabling our enterprise to complete its transformation."
The CEO added that even as the company built up its digital business, it had exited certain traditional operations and closed 13 manufacturing plants, 130 processing labs, and reduced its workforce by 47,000 since 2003.
It also streamlined its operations by reducing the number of business segments from three to two. The commercial unit will report to Philip Faraci, who will continue to serve as the company's president while taking on the COO role, while the consumer segment will be headed up by COO Laura Quatela. Both will report to Antonio Perez, the company's chairman and CEO, an earlier report noted.
An analyst ZDNet Asia spoke to earlier said Kodak's woes were compounded by the fact that it did not have a strong presence outside the United States or a sizable share in the premium camera market, losing out to rivals such as Fujifilm and Canon.