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Eastman Kodak Co. expects to emerge from Chapter 11 bankruptcy in the third quarter. Its plan for emergence calls for current stock to be eliminated, and the company to swap newly minted shares for some $2.7 billion of unsecured debt.
Kodak, which filed bankruptcy in the early morning hours of Jan. 19, 2012, late Tuesday night said it had filed its plan of reorganization and disclosure statement with the U.S. Bankruptcy Court for the Southern District of New York.
The filings—a 78-page plan of reorganization and the 182-page disclosure document—describe Kodak’s post-emergence business plan and details its plan to shed its debts. The plan maintains and extends Kodak’s leadership position in the commercial imaging industry, the company said.
Under the reorganization plan, priority claim holders—secured claim holders and second-lien holders, with combined claims of some $424 million—will get all their money back. General unsecured debt holders, with combined claims of $2.7 billion, will get stock.
The plan was filed the day after Kodak announced had reached a comprehensive settlement agreement with its largest creditor, the U.K. Kodak Pension Plan, that calls for Kodak to spin off its Personalized Imaging and Document Imaging businesses under new ownership to KPP for cash and non-cash consideration of $650 million.
Kodak said the post-bankruptcy company will help define the future development of that industry through its high-quality, cost-effective products and services, leveraging its unique combination of technological and market strengths and competitive differentiators, officials said.
The disclosure statement provides a description of the proposal of distributions to the company’s creditors, and financial forecasts.
The company expects the Bankruptcy Court to schedule a hearing in mid-June to determine the adequacy of the disclosures. The company then plans to schedule a vote on the plan by creditors.
“The filing of the Plan of Reorganization and Disclosure Statement represents a major milestone in our reorganization: this initiates our emergence process,” said Chairman and CEO Antonio Perez. “We now have a clear path forward for Kodak, and we are positioning the company for a profitable and sustainable future.”
Kodak, Perez added, has fulfilled the four primary objectives for its Chapter 11 filing: bolstering liquidity, monetizing non-strategic intellectual property, fairly resolving legacy liabilities and focusing on its most valuable business lines.
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