Photo finish as Kodak files for bankruptcy

NEW YORK: Eastman Kodak, the photography icon that invented the hand-held camera, has filed for bankruptcy protection and plans to shrink significantly, capping a prolonged plunge for one of America’s best-known companies.

Kodak is one of the biggest corporate casualties of the digital age after failing to quickly embrace more modern technologies such as the digital camera – ironically, a product it invented.

“They got behind the curve on the analogue-to-digital shift, and they were way behind for a long time,” said Ananda Baruah, a Brean Murray analyst who covers Kodak.

Kodak once dominated its industry, and its film was the subject of a popular 1973 song, Kodachrome, by Paul Simon.

The bankruptcy may give Kodak, which traces its roots to 1880, the ability to find buyers for some of its 1 100 digital patents, a major portion of its value. Kodak employs 17 000 people worldwide, down from 63 900 just nine years ago.

“It is a very sad day even though we had anticipated it,” said Shannon Cross, an analyst at Cross Research who has had a “sell” rating on the company since 2001. “If it emerges, it will be a much smaller entity.”

According to papers filed with the US bankruptcy court in Manhattan, Kodak had about $5.1 billion of assets and $6.75bn of liabilities at the end of September.

In court documents, chief financial officer Antoinette Mccorvey said the company planned to sell “significant assets” during the bankruptcy.

Kodak’s market value has sunk below $100m from $31bn 15 years ago, when its share price topped $94. Yesterday the shares closed at 30c.

The company has struggled to meet pension and other obligations to more than 65 000 workers, pensioners and others who take part in its employee benefit programmes.

Patent litigation has been a major part of Kodak’s recent efforts to generate revenue, and the company has sued Apple, Research in Motion and HTC over alleged violations.

Apple filed a limited objection in the bankruptcy case yesterday to preserve its rights in patent litigation. – Reuters