ROCHESTER, N.Y. – Once a leader in the photography, Kodak (OTC: EKDKQ) saw its market shrink into oblivion with the rise of the digital camera. That move eventually forced the company to file for Chapter 11 protection in January 2012. Following months of restructuring, the company announced that it had emerged from bankruptcy on Tuesday.
That end of bankruptcy, which was approved by U.S. Bankruptcy Court last month, will in motion a chain reaction action for the company as it former shares (EKDKQ) will cease to exist and a new generation of stock shares will be created. The company’s board will also be reshuffled with two-thirds of the directors departing. Its Document Imaging and Personalized Imaging business units will become the property of the pension fund covering Kodak’s former workforce in the United Kingdom – as part of that transition nearly 3,200 employees will become work for the pension fund as well.
Emergence also means that the company is no longer under the direct supervision of the Bankruptcy Court and its Trustee. According to Robert Rock, senior counsel with Tully Rinckey PLLC – a firm that specializes in bankruptcy – the experience of emerging from bankruptcy is a sort of ‘Prometheus unbound’ moment as the weight of bankruptcy is released.
Before bankruptcy, Kodak’s major shareholders included the Vanguard Group and TIAA CREF, following bankruptcy ownership will transfer to the firms who have helped pay for its emergence. For many, this means that their old Kodak stock is nothing but a tax write-off as the shares are worthless.
Company representative, Christopher Veronda, said the company will take steps to get its new stock listed on one of the major stock exchanges, with a new trading symbol.
However, questions remain about the company’s future as many of the company’s most recognizable businesses were sold to pay debts. The company has also announced that it will not compete in the digital camera market, though it did enter an agreement to license their name to a line of digital cameras. In addition, attempts to sell more than 1,000 digital imaging patents has been cumbersome at best. The company had hoped those patents would fetch as much as $ 2.6 billion, but bidders were only willing to pay $ 527 million for the lot.
So what will the new Kodak be? That remains to be seen, but the new company will be more agile than the old Kodak and of what remains there is still potential for growth – including the commercial printing and packaging business where the company’s market share is small. Ultimately, the company will have to develop new technologies or it will follow the same path as RCA.