updated 05:00 pm EDT, Tue September 3, 2013
Unsecured shareholders, including pensioners, paid pennies on the dollar
Earlier today, Kodak Chairman and Chief Executive Officer Antonio M. Perez announced that Kodak has officially emerged from the Chapter 11 bankruptcy progress, and has completed the final steps in the restructuring process. The new company is a "technology company serving imaging for business markets" following divestiture of a large percentage of its previously-existing businesses.
Perez said that the company has "been revitalized by our transformation and restructured to become a formidable competitor -- leaner, with a strong capital structure, a healthy balance sheet, and the industry's best technology."
"We are setting a trajectory for profitable growth," Perez said. "We have the right technology at the right time as printing markets increasingly transition to digital. Our broad portfolio of offset, hybrid and digital solutions enables customers to make the transition at their chosen pace using our breakthrough technology solutions."
The company has filed notice of the effectiveness of its plan of reorganization with the US Bankruptcy Court for the Southern District of New York. All previously-issued and outstanding shares of Kodak common stock were cancelled, as were all other previously-issued and outstanding equity interests. Kodak issued shares of a new class of common stock to participants in the rights offerings, and will issue additional shares of this new class of common stock to unsecured creditors as provided in the plan of reorganization. Kodak expects to make initial distributions on account of general unsecured claims by the end of September.
Unsecured creditors will be paid between four and five cents on the dollar. Secured claims will be paid in full. The pool of unsecured creditors were owed as much as $2.2 billion collectively, with the newly-minted share award to that class worth nearly $66.15 million. Also in the "unsecured creditors" group are Kodak retirees, an assembly previously owed as much as $635 million.
"Kodak is one of the best-known names of American business," Judge Allan Gropper said during the final filing in court on August 20. "Its decline in bankruptcy is a tragedy of American economic life. I've reviewed dozens of letters from Kodak shareholders asking how the company in which they invested fell so far." The company has lost $1.76 billion since 2008.