updated 03:20 pm EDT, Wed May 1, 2013
Vast majority of recovery shares being awarded to secured creditors
Eastman Kodak has filed its latest plan to exit from Chapter 11 bankruptcy that gives ownership of the venerable company to unsecured creditors and bond holders. Second-lien note holders will receive 85 percent of common stock in the company, worth nearly $374.85 million. Unsecured creditors will be awarded the remaining 15 percent of shares.
The pool of unsecured creditors are owed as much as $2.2 billion, with the share award to the class worth approximately $66.15 million. Also in the "unsecured creditors" group are Kodak retirees, an assembly owed $635 million. Current shareholders will lose the shares they hold, and will be awarded nothing under the Chapter 11 plan.
A sottement announced earlier this week is giving control of Kodak's personalized imaging and document imaging business to Kodak's UK pension plan, rather than an outright sale to Brother.
"We now have a clear path forward for Kodak, and we are positioning the company for a profitable and sustainable future," said Kodak Chief Executive Officer Antonio M. Perez. He added that the filing is "a major milestone in our reorganization."
The company expects to exit Chapter 11 status in the third quarter of 2013, with a projected valuation of $441 million. By the end of 2014, Kodak claims to be able to grow its worth to $581 million, and up to $1.625 billion after four years.
To escape from the financial pit, the company plans on focusing on the strongest segment it has left -- digital printing. At the end of 2012, the company announced it would sell its print-film business and several other related businesses to raise additional funds. The imaging giant made the move public in the last days of its patent portfolio auction.
Jusge Allan Gropper, the judge overseeing the Kodak bankruptcy proceedings, approved a $525 million patent sale to assist the company in successfully navigating the Chapter 11 process. The completed sale allowed the company to obtain an additional $830 million in financing on top of the patent proceeds.