ROCHESTER, NY (AP) — Photography icon Eastman Kodak has filed for Chapter 11 bankruptcy protection, as it seeks to boost its cash position and stay in business.
The move comes as the ailing company has failed to find a buyer for its trove of 1,100 digital imaging patents. Kodak said in November that it could run out of cash in a year if it didn't sell the patents, for which it hoped to fetch billions.
Eastman Kodak Co. said early Thursday that it has secured $950 million in financing from Citigroup Inc., and expects to be able to operate its business during bankruptcy reorganization and pay employees. The Rochester, N.Y.-based company, which was pummeled by foreign competition and then severely shaken by the digital revolution, has invested huge sums in new lines of inkjet printers that are finally on the verge of turning a profit.
CEO Antonio Perez said in a statement that the bankruptcy filing is "a necessary step and the right thing to do for the future of Kodak."
The company and its board are being advised by Lazard, FTI Consulting Inc. and Sullivan & Cromwell LLP. Dominic DiNapoli, vice chairman of FTI Consulting, will serve as chief restructuring officer. Kodak expects to complete its U.S.-based restructuring during 2013.
On its website, Kodak assured customers that the nearly $1 billion in debtor-in-possession financing would be sufficient to pay vendors, suppliers and other business partners in full for goods and services going forward. The bankruptcy filing in the Southern District of New York does not involve Kodak's international operations.
The Chapter 11 filing had been rumored for weeks. Multiple directors have resigned from Kodak's board and the company last week announced that it realigned and simplified its business structure in an effort to cut costs, create shareholder value and accelerate its long-drawn-out digital transformation. Since the start of the year, Kodak said it now has two business units — commercial and consumer — instead of three.
Previously, Kodak's business segments were divided into its traditional film and photo paper products, consumer digital imaging and graphic communications, which included printing equipment. Home photo printers, commercial inkjet presses, workflow software and packaging are viewed as Kodak's new core. Kodak has said it hopes the printer, software and packaging businesses will more than double in size by 2013 and account by then for 25 percent of its revenue, or nearly $2 billion.
Kodak did not announce job cuts as part of the bankruptcy protection filing. The company's payroll has plunged below 19,000 from 70,000 a decade ago.