NEW YORK – Kodak attorneys asked a federal bankruptcy judge Tuesday to approve its plan to emerge from Chapter 11 protection as a smaller company.
Founded in 1880, Eastman Kodak Co. filed for bankruptcy protection last year after struggling with increasing competition, the shift from film to digital photography and growing debt levels. Since its filing, Kodak has sold off many of its businesses and patents so it can concentrate on commercial and packaging printing.
If Judge Allan Gropper gives his approval, the storied company could emerge from court oversight within weeks. Kodak has set Sept. 3 as its target date.
Last week, a majority of the company’s shareholders voted to approve its plan to emerge. But some retirees, shareholders and other parties have objected to it.
Although shareholders argued that they should be entitled for something in exchange for their stock, Gropper said he ruled at a previous hearing that they weren’t. He noted that the company’s creditors will only receive 4 cents or 5 cents on the dollar for their investments and that they’re entitled to be paid before shareholders are. Generally, holders of common stock do not receive anything for their shares when a company emerges from Chapter 11.
The U.S. Trustee has also filed an objection challenging the legality of hefty cash and stock bonuses that Kodak executives are expected to receive when the Rochester, N.Y., company exits from bankruptcy protection.
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