Placeholder image

Kodak CEO explains reasons behind Chapter 11 filing

October 9, 2012

Antonio Perez claims filing for bankruptcy does not indicate company’s demise.

In an interview with PrintWeek, Antonio Perez, CEO of Kodak, claims that the media misread the company’s reasons for filing for Chapter 11 bankruptcy in January, with the decision being intended to address a number of issues facing the company rather than it indicating its demise.

Perez lists four objectives as to why the company decided to file for Chapter 11 bankruptcy in the US. Firstly, he says, it was to “bolster our liquidity in the US” as he claims that the majority of Kodak’s sales are made outside of the US.

Secondly, the move was to enable to company to shift from a B2C to a B2B company, with Perez stating: “We used to be fundamentally a B2C company but we realized that the technologies that we had […] drove us to markets that were sustainable, large and growing, but were B2B markets. So Chapter 11 allows you to shut down some businesses and focus on other businesses at the lowest possible cost.”

The third reason Perez gives was to make money from its patent portfolio, which Perez says is no longer of interest to Kodak as it plans to move away from being a B2C company. Despite recent reports that the company has put the sale of its 1,100 digital patents on hold and is reconsidering its sale, Perez upheld that that the sale was still ongoing: “We’re trying to get the best possible deal for the IP – we could sell the IP very quickly but by waiting a little longer we’re trying to get the best possible deal […] We put those two businesses for sale and with both those and the IP we can wait and if we don’t sell them we’ll do something else.”

Finally, Perez says that filing for bankruptcy was to “deal in a fair way with its legacy liabilities” such as employee and retirees health and pensions costs: “This is the path to come out of Chapter 11. We have a lot of cash outside the US and now we have cash in the US because we have a deal […] we’re solving the legacy liability and we are getting those resolved under the process of Chapter 11 in a fair way for all parties.”

Regarding the company’s planned emergence from bankruptcy in 2013, Perez remained optimistic: “We’ve given an indication that mid-year is a good time for us to come out – it could be a little earlier it could be at mid-year. But we have to solve all these issues and we’re making a lot of progress with every one of those.”

Kodak announced in September that it would cease its inkjet printer business from 2013 and cut a further 200 jobs, adding to the 2,700 lay-offs already made in 2012 and the 1,000 jobs it had previously announced would be cut.

Categories : Products and Technology

Leave a Reply