updated 03:25 pm EST, Fri January 11, 2013
Approval paves the road to an additional $830 million in financing
Jusge Allan Gropper, the judge overseeing the Kodak bankruptcy proceedings, has given the go-ahead to its proposed $525 million patent sale. While the offer is just a small fraction of the billions Kodak was originally expecting for the portfolio, the completed sale will allow the company to continue with a plan to obtain an additional $830 million in financing on top of the patent proceeds, and exit bankruptcy in the first half of 2013.
"The monetization of non-core IP assets achieves one of Kodak's key restructuring objectives while positioning its commercial imaging business for further growth and success," the company said in a statement. The patents were purchased by a group of companies including Adobe, Amazon, Apple, Google and Fujifilm. The deal allows for the licensing of patents, settlement of all patent-related lawsuits, and the commencement of a cross-licensing agreement between Kodak and FujiFilm.
Bondholders providing new financing to the company include JP Morgan, UBS AG, Centerbridge Partners, and GSO Capital Partners. The bankrupt film and camera pioneer has laid off 1,000 workers since August, and more job losses may be necessary to stay afloat, especially considering the auction failure. Kodak's workforce has fallen to approximately 14,700 from a peak of 145,000 some 30 years ago.