As Eastman Kodak Co. investors bet
the 131-year-old photographic pioneer was headed for bankruptcy,
the company decided Chapter 11 was the simplest way to become
the leaner digital printing specialist it aspires to be.
Bankruptcy allows sales of the photography divisions and
patents Chief Executive Officer Antonio Perez wants to jettison
to pay off legacy employee benefits and creditors, as he focuses
Kodak on faster, flexible commercial and consumer digital
printers and the company’s superior ink. Its trove of 11,000
patents could fund expansion by allowing the company to sue for
more licensing fees — a move it has pursued more aggressively
in recent weeks.
Efforts to turn Kodak into a company that makes
sophisticated printers for the publishing, packaging, and
advertising businesses have burned cash. Raising funds from
intellectual property stalled amid delays in a royalty battle
with Apple Inc. (AAPL) and Research In Motion Ltd. (RIM) Would-be asset
buyers shunned deals because of concern that sales made before a
Chapter 11 filing would be scrutinized in court for signs that
Kodak was fraudulently transferring assets cheaply. Now that the
filing has been made, that worry is gone.
“This is a melting ice cube of a business,”
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