We've spoken with thousands of Kodak employees and retirees over the past month. In an effort to continue to be a source of useful information, expertise and opinion, we are starting a Kodak blog series today that will continue until there is nothing left to say about Kodak's bankruptcy.
The first topic will be bankruptcy in general.
Kodak has filed for bankruptcy protection under Chapter 11 which means that the company intends to reorganize itself into a new company. The new company will be smaller and will have likely shed some of business divisions and some of the legacy costs of the old company. Legacy costs can include retiree benefits, pension obligations and environmental obligations. We will cover Kodak pensions in other posts, but it's worth noting here that Kodak has noted that it does NOT intend to abandon its pension - it intends to fund its pension. In essence, Chapter 11 means that, though there will be some pain as parts of the business are wound down or sold, Kodak will still exist and will, hopefully, grow to be a large and successful company again.
Chapter 7 is the other kind of bankruptcy protection - the kind where the business will no longer exist in any form after the proceedings. It is possible that down the line Kodak will file for this protection, but it seems very unlikely right now. It's important to remember that Kodak has many profitable business lines running, that it sits on some likely very valuable assets and that it has the potential to grow again into a large company.
Our expectation at present is that we will see a company about 50% as large as the current Kodak when it comes out of Chapter 11.
Questions? Find me on twitter at @chris_crom or follow or subscribe to this blog to comment.
Business Development Manager