Despite its best efforts, Kodak has been forced to file for Chapter 11 bankruptcy following its ninth consecutive quarterly loss.
At the beginning of this month we reported on rumours that the company was attempting to sell 1,100 patents in a last ditch bid to prevent the need to file for bankruptcy, however it seems as if no one wanted to buy them, probably as anyone interested knew they could pick them up cheaper if the company did go bankrupt.
"The board of directors and the entire senior management team unanimously believe that this is a necessary step and the right thing to do for the future of Kodak," said Chairman and Chief Executive Antonio M. Perez.
Perez took control of Kodak in 2005 having previously run the printer section of HP, however despite hopes he would turn the fortunes of the company around, Kodak has since lost $7 billion in market value.
The company's fortunes floundered since cameras moved from film to digital and despite growing its printer business by 44 per cent year-on-year in the last quarter of 2011, it still only holds 2.6 per cent of that market.
“Kodak is taking a significant step toward enabling our enterprise to complete its transformation," said Perez. "The Board of Directors, the senior management team and I would like to underscore our appreciation for the hard work and loyalty of our employees. Kodak exemplifies a culture of collaboration and innovation. Our employees embody that culture and are essential to our future success.”
Speaking of employees, there is now some uncertainty over the future of the 19,000 company employees and it is also a worrying time for the company's retirees, as the company could forgo its pension and health-care obligations by going bankrupt.
Kodak has secured $950 million in funding from Citigroup bank to allow the company to stay afloat during the bankruptcy proceedings. The company believes the funding will let it "focus on its most valuable business lines."
Kodak currently has $5.1bn in assets and $6.75bn in debts and owes money to a number of big companies including Wal-Mart, Sony, Amazon, Nokia, Disney and Warner Brothers.
In a statement, Kodak said it hoped to complete US-based restructuring by 2013, and said that subsidaries outside the US are not subject to proceedings and it will honour all obligations to suppliers "in the ordinary course."