Eastman Kodak (NYSE:EK) today announced that it has filed for Chapter 11 bankruptcy protection after securing $950 million in financing from Citigroup.
The 132 year old photography pioneer will use the filing to try and boost its cash position through the sale of its patent trove of 1,100 digital imaging patents which some analysts have estimated to be worth around $3 billion. The company said back in November that it would need to sell the patents within the year or it would run out of cash. Kodak stated that it will be able to continue operations and pay employees during the bankruptcy and will hope to use the filing to restructure itself into a more profitable company focusing on the sale of inkjet printers.
The company has struggled to adjust it business model in the last few decades to keep up with changing demands in technology. In efforts to find its feet and reshape its business the company has burned through a strong cash position which left the company dependent on the sale of patents to survive. The bankruptcy has been rumored for some time now despite statements from the company that it had no intention of going bankrupt. Kodak recently announced that it realigned and simplified its business structure in an effort to cut costs but that was to little to late.
Antonio Perez, CEO of Kodak, stated that the bankruptcy filing is “a necessary step and the right thing to do for the future of Kodak.”
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