Kodak took another step along the road to recovery yesterday, after receiving court approval to borrow $950 million in restructuring funds. Nearly a month after the camera maker filed for Chapter 11 bankruptcy
, US Bankruptcy Judge Allen Gropper granted Kodak's request on Thursday, allowing the company to continue operations during its ongoing transition
. Gropper's decision, handed down in a Manhattan court, follows a series of negotiations between Kodak and its lenders, and adds an extra $300 million to the $650 million awarded during January's Chapter 11 filing. The company is also allowed to end its sponsorship of the Kodak Theatre in Los Angeles, after successfully arguing that doing so would be in the best interest of Kodak and its creditors. Under the deal, Kodak is obliged to pay $72 million over the course of 20 years. It currently shells out $3.6 million per year and still has $38 million in outstanding payments, but Kodak's lawyers argued that the agreement was too costly. Kodak Chairman and CEO Antonio Perez issued the following statement in response to yesterday's decision: "Today's agreement is another step towards ensuring that Kodak is positioned to execute on the goals the Company set out last month: Bolster our liquidity in the U.S. and abroad, monetize our non-strategic intellectual property, fairly resolve legacy liabilities, and enable Kodak to focus on its most valuable business lines."
Eastman Kodak Company Receives Court Approval of Completed Debtor-in-Possession Financing
ROCHESTER, N.Y., Feb. 15–Eastman Kodak Company ("Kodak" or the "Company") (OTB: EKDKQ.PK) announced today that Judge Allan L. Gropper of the U.S. Bankruptcy Court for the Southern District of New York entered a final order approving the Company's debtor-inpossession financing for $950 million between Kodak and its lenders and second-lien bondholders.
Antonio M. Perez, Chairman and Chief Executive Officer, stated: "Today's agreement is another step towards ensuring that Kodak is positioned to execute on the goals the Company set out last month: Bolster our liquidity in the U.S. and abroad, monetize our non-strategic intellectual property, fairly resolve legacy liabilities, and enable Kodak to focus on its most valuable business lines."
Kodak and its U.S. subsidiaries filed to reorganize its U.S. business under Chapter 11 on Jan. 19. Non-U.S. subsidiaries were not part of the filing. The $950 million includes the initial $650 million approved as part of the First Day Motions, as well an additional $300 million in incremental availability.
The Company and its Board of Directors are being advised by Lazard, AlixPartners LLP, and Sullivan & Cromwell LLP