Eastman Kodak, the 131 year old company that dominated the photographic film business for most of the 20th century, will file for bankruptcy this week if their recent efforts to sell off digital patents should prove unsuccessful, according to a Wall Street Journal report citing inside sources. A filing could happen as soon as late January, early February.
VatorNews contacted Kodak, asking for comment on the report. "We don't have a comment, as it's our long-standing policy not to comment on market rumors or speculation," said a representative from the company.
The beleagured company, which at one point in the 1970s held 90% of the U.S. photographic film sales, has experienced increasing hardships since the advent of digital film in the 1990s. Kodak's last profitable year was 2007, but since then the company has experienced $1.8 billion loss and currently owes a crippling $160 million to creditors.
Kodak's cash holdings were listed at $957 million as of June 2011, though the company spent $847 million in the first half of the year. Kodak indicated recently that it would attempt to sell over 1,100 patents in order to stay afloat, though the company had some difficulty in selling.
"Kodak is committed to meeting all of its obligations and has no intention of filing for bankruptcy," said the company in a statement on September 30, 2011, in response to rumors that it had hired law firm Jones Day to explore Chapter 11 proceedings. The following trading day after that statement, Kodak experienced a momentary surge in share prices, with stocks rising 72% by the close of day.
If Kodak seeks bankruptcy protection in the coming weeks, their patent sales would be conducted through a court-supervised bankruptcy auction.
Other recent problems for Kodak include trading under $1 per share for the past 30 days, as well as being issued a warning by the New York Stock Exchange on Monday that unless it can boost its share price, it could be delisted. Kodak shares fell over 80% over 2011.
Also, in October, the company's Fitch credit rating was lowered from CCC to CC, indicating "default with little chance for recovery." Three members have recently left Kodak's board, Laura D. Tyson, Adam Clammer, and Herald Chen.
[Image Source: The Christian Science Monitor]
