Onward and upward, isn't that right? For Kodak
, it sure hopes so. After falling from grace as one of the premier names in photography and printing, right into Chapter 11
, the company has finally announced a new plan and settlement that will hopefully push it towards an exit from bankruptcy. Eastman Kodak Company today announced a comprehensive settlement agreement with the U.K. Kodak Pension Plan (KPP), its largest creditor. Under the agreement, which will be filed with the U.S. Bankruptcy Court, Kodak’s Personalized Imaging and Document Imaging businesses will be spun off under new ownership to KPP.
The settlement agreement provides, among other things, for the spin-off of Kodak’s Personalized Imaging and Document Imaging businesses to KPP for cash and non-cash consideration of $650 million.Certain proceeds will be used to support the emergence of Kodak from Chapter 11 and the growth of its Commercial Imaging business. The agreement also settles approximately $2.8 billion of claims by KPP against Kodak and certain of its affiliates.
“In one comprehensive transaction, Kodak will realize its previously announced intention to divest its Personalized Imaging and Document Imaging businesses and settle its largest legacy liability,” said Antonio M. Perez, Kodak Chairman and Chief Executive Officer. “The KPP transaction moves us past several key hurdles in our reorganization, resolving all potential claims worldwide, assuring continued operations outside of the United States, placing our Personalized Imaging and Document Imaging businesses with a new owner that recognizes their value and is focused on their growth and success, and providing the remaining liquidity we require to emerge from Chapter 11. We are very pleased with the transaction, the value it creates for our stakeholders, and the dedication and creativity of KPP that made it possible to achieve this extraordinary result.”
Kodak intends to file a draft Chapter 11 plan with the Bankruptcy Court on April 30, and to seek approval of the KPP settlement and related transactions promptly thereafter, withdrawing the previously-filed motion
for the standalone sale of the Document Imaging business. Whether or not this will allow the company to start cranking out new kit anytime soon, however, remains to be seen.