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It's only Chapter 11.


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<blockquote>

<p>Les: I'm trained as a scientist and a lawyer and hold technical patents and run a technology firm. That you are using film is great. You are in a diminishing minority. My comments are directed to the market reality. The largest fact in that reality is that to obtain financing to go forward, the largest film manufacture in the world was required to close down their film operation. The only asset seen having real value in Kodak in the bankruptcy by the people providing the money were their patents in digital photography. That is reality.</p>

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<p>John Ellingson: Whoppee about your credentials. I'm so impressed. But maybe you skipped a few liberal arts courses and concentrated your curriculum? What are you doing on a film forum (rhetorical question)? Who cares about your opinions and prognostications? We're here because we love film and it works very well for us. Moreover, the film division is one of the only, if not the only, division within Kodak that turns a profit. And with virtually no promotional advertising. All of their other forays have been, let us say, "problematic"... That is reality.</p>

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<p>From what I have read, Kodak has changed their business plan and has incorporated the film division into the new division. I haven't read anywhere that they plan on stopping film production. <br>

John, I have to wonder if the environmentalist side of you is seeing some kind of happiness with the demise of company that is deemed a polluter? </p>

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<p>Kodak have combined the film division into their other two divisions (professional and consumer) and also explicitly declared a continuation in the film line as long as it is making money. They have also explicitly stated that the film line is *profitable*. This would definitely not happen if the investors had placed conditions that film would be dropped.<br>

So - film making a profit. Film explicitly merged into existing professional and consumer lines. Kodak have also announced that they have seen a resurgence in film use (obviously not enough to stop them going bust). <br>

My guess is a consortium of movie industry investors will step in to take it over (after all, over 60% of movies in the billboard top 20 are still film based and mostly kodak.</p>

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<blockquote>

<p>There is no film division in Kodak anymore. That is the reality.</p>

</blockquote>

<p>John Ellingson: Semantics; what William and Tim state. Why do you continue with your biased drivel? Get a life.</p>

<p>And again, what are you doing here (rhetorical question)?</p>

<p>No bubble; film works for me, and for many others. Again, reality.</p>

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I never read anywhere that Kodak was required to shut down their film production in order to get financing. And John, you're trying to spread that as fact, when it's not true. That's how rumors get started on the internet, and pretty soon people believe that rumor and it gets perpetuated.

 

You are ASSUMING that was a condition for Kodak to get financing, but you're trying to state it as a fact. And it isn't. I have not read a single article or document anywhere that said "Kodak will be required to shut down their production of film as a condition."

 

In fact, Kodak has stated the exact opposite...that they will continue their film production after the reorganization.

 

I also don't understand why people who don't use film are in a film forum.

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<p>As Tim and William said, Kodak has combined three divisions into two. They are marketing-based: the Commercial Segment and the Consumer Segment. That does not mean that the actual production has been bifurcated- only the marketing. The elimination of FPEG does not mean the elimination of the components of FPEG.</p>

<p>There is no "film division" anymore as an external division, and there are no other product-line-specific external divisions anymore, either. Yet there are still internal divisions doing what they were doing before.<br /> It's just a change in management structure-one which also enables Kodak to no longer have to show that FPEG was the only one making a profit.</p>

<p>BTW, Chris, thanks for your cogent reply just before mine. You said what I was going to say.</p>

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<p>What if they're trolling?<br>

I am not saying John Ellingson is; he has points to make, and has stimulated conversation. I don't think trolling is his intention.<br>

But there comes a point where it starts to have something of the same effect. If someone goes on the Nikon forum and constantly talks down Nikon, after a while people are going to say, "What are you doing here?"<br>

I know the analogy is imperfect, but I think you will get my point.</p>

<p>I also don't think anyone is "attacking him merely for posting"- it's the content of the posts that people are objecting to.</p>

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<p>Folks,</p>

<p>Here's the deal. Forums on photo.net aren't a closed loop. Anyone can post anywhere they want. Simply disagreeing with other people about something like the future of a company like Kodak is far different from standing around telling everyone that film sucks. For example, saying "with kodak gone, film is dead" on a thread like this is a relevant point of conversation. Saying "film is dead" on a thread where the subject is "What is your favorite slide film" is a different sort of thing and would not be tolerated.</p>

<p>I understand not wanting to hear from film naysayers if one is a film user. I'm sure it's depressing. But my suggestion would be for that film user to stay out of threads that discuss the possible downfall of one of the biggest film producers in history and stick to threads that are about the actual use of film. </p>

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<p>Something in the range of 20-25 million rolls of film were sold in the US alone last year. I don't know if that includes single-use cameras.</p>

<p>Kodak may think 25 million of something is too small to bother with but I am sure there are companies, or potential companies, that would love to sell those 25 million items.</p>

 

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<p>All quotes from one contributor.</p>

<p>Not applicable in US Bankruptcy court. The judge makes the rules, hence the term "rulings"</p>

<blockquote>

<p>...The guys with the money make the rules.</p>

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<p>The most recent line of credit extension was likely negotiated pre-petition (before filing) and fulfilled/approved post-petition (after filing). It is highly unusual for a lender to dictate how company does business but Citigroup most surely approved a budget drawn up by Kodak. Moreover, it's unlikely a bankruptcy judge would approve a loan stipulating that a division be closed especially if it generates positive cash flow and constitutes <em>26% of the Company’s consolidated revenue for 2011</em>.</p>

<p>According to the first-day pleadings, Kodak blames 4 factors for their financial position.<br>

1. Market conditions since 2008 (low demand; film is one of many)<br>

2. "legacy post-employment benefits continue to consume a substantial amount of the Debtors’ cash"<br>

3. Their inability to collect from IP lawsuits.<br>

4. Diminishing trade credit and non-customary trade terms.</p>

 

<blockquote>

<p>...regardless of Kodak's claim in the piece you cite, the guys with the money placed no value on the film operation and abandoned it as a requirement of financing Kodak going forward.</p>

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<p>Kodak never "announced" this and there is no "restructuring plan" yet. The judge gave them an extension for re-organization until Feb 15, 2013.</p>

<blockquote>

<p>Kodaks announced restructuring plan is to abandon the film and photography business and focus on printers. Kodak at one time accounted for 91% of the film market in America and that market, like the one for buggy whips, has disappeared. Film is dead and is relegated to the world of antiques.</p>

</blockquote>

 

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In bankruptcy companies arrange what is known as debtor in possession (dip) financing before filing. In the case of Kodak this financing

came from Citigroup and required Kodak to abandon film. The court has approved the financing. Under bankruptcy law the DIP financing

is put in first place ahead of all other creditors. In effect the judge has already ruled that Kodak will abandon the film business.

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<blockquote>

<p>In bankruptcy companies arrange what is known as debtor in possession (dip) financing before filing. In the case of Kodak this financing came from Citigroup and required Kodak to abandon film. The court has approved the financing. Under bankruptcy law the DIP financing is put in first place ahead of all other creditors. In effect the judge has already ruled that Kodak will abandon the film business.</p>

 

</blockquote>

<p>John, can you give a reference for this statement, because I have read everything I can find about this and I have not seen anything in print saying that Kodak had to abandon their film business in order for the financing to be approved, or do you have some mysterious source in Kodak?</p>

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<blockquote>

<p>In bankruptcy companies arrange what is known as debtor in possession (dip) financing before filing. In the case of Kodak this financing came from Citigroup and required Kodak to abandon film. The court has approved the financing. Under bankruptcy law the DIP financing is put in first place ahead of all other creditors. In effect the judge has already ruled that Kodak will abandon the film business.</p>

</blockquote>

<p>To be honest, I'm not seeing this being reported anywhere either. Now, it's late and I'm tired. So who knows. But given the sheer eye-candy of the headline "Kodak forced to stop making film" I would think there would have been more coverage of it if such a thing were public.</p>

<p>Now, there's always the chance that it isn't public knowledge. But given the fact that this is happening in a court of law, I don't know how likely that is.</p>

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<p>Oh well. Life without film will be kind of strange. I guess I will not be buying a Leica M7 afterall next year. Shooting film is my hobby but take away the film and I guess I am going Golfing more often. I enjoy bicycling and golf and I feel pretty sure digital gadgets will not make those things go away. .</p>
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<p>Here are a few quick references. You will note that there no reference to continuing the film business, but to closing down those manufacturing plants and labs. If anyone has access to the bankruptcy court PACER system you can actually download the agreement with Citi regarding the DIP package.<br>

<a href="http://www.zdnetasia.com/report-citigroup-to-provide-kodak-bankruptcy-funds-62303513.htm">http://www.zdnetasia.com/report-citigroup-to-provide-kodak-bankruptcy-funds-62303513.htm</a></p>

<p><a href="http://bizmology.hoovers.com/2012/01/19/bankrupt-eastman-kodak-secures-950-million/">http://bizmology.hoovers.com/2012/01/19/bankrupt-eastman-kodak-secures-950-million/</a></p>

<p><a href="http://industryanalysts.com/IA10/CIO/Entries/2012/1/20_Kodak_Files_For_Chapter_11.html">http://industryanalysts.com/IA10/CIO/Entries/2012/1/20_Kodak_Files_For_Chapter_11.html</a></p>

<p><a href="http://www.kodaktransforms.com/">http://www.kodaktransforms.com/</a></p>

<p><strong>EASTMAN KODAK COMPANY AND ITS U.S. SUBSIDIARIES COMMENCE VOLUNTARY CHAPTER 11 BUSINESS REORGANIZATION </strong><br>

<em>Flow of Goods and Services to Customers to Continue Globally in Ordinary Course </em><br>

<em>Non-­</em><em>‐U.S. Subsidiaries Are Not Included in U.S. Filing and Are Not Subject to Court Supervision </em><br>

<em>Company Secures $950 million in Debtor-­</em><em>‐in-­</em><em>‐Possession Financing in U.S. </em><br>

<em>Kodak’s Reorganization to Facilitate Emergence as Profitable and Sustainable Enterprise </em><br>

ROCHESTER, NY, January 19, 2012 – Eastman Kodak Company (“Kodak” or the “Company”) announced today that it and its U.S. subsidiaries filed voluntary petitions for chapter 11 business reorganization in the U.S. Bankruptcy Court for the Southern District of New York.<br>

The business reorganization is intended to bolster liquidity in the U.S. and abroad, monetize non-­‐ strategic intellectual property, fairly resolve legacy liabilities, and enable the Company to focus on its most valuable business lines. The Company has made pioneering investments in digital and materials deposition technologies in recent years, generating approximately 75% of its revenue from digital businesses in 2011.<br>

Kodak has obtained a fully-­‐committed, $950 million debtor-­‐in-­‐possession credit facility with an 18-­‐ month maturity from Citigroup to enhance liquidity and working capital. The credit facility is subject to Court approval and other conditions precedent. The Company believes that it has sufficient liquidity to operate its business during chapter 11, and to continue the flow of goods and services to its customers in the ordinary course.<br>

Kodak expects to pay employee wages and benefits and continue customer programs. Subsidiaries outside of the U.S. are not subject to proceedings and will honor all obligations to suppliers, whenever incurred. Kodak and its U.S. subsidiaries will honor all post-­‐petition obligations to suppliers in the ordinary course.<br>

“Kodak is taking a significant step toward enabling our enterprise to complete its transformation,” said Antonio M. Perez, Chairman and Chief Executive Officer. “At the same time as we have created our digital business, we have also already effectively exited certain traditional operations, closing 13 <br>

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manufacturing plants and 130 processing labs, and reducing our workforce by 47,000 since 2003. Now we must complete the transformation by further addressing our cost structure and effectively monetizing non-­‐core IP assets. We look forward to working with our stakeholders to emerge a lean, world-­‐class, digital imaging and materials science company.” <br>

“After considering the advantages of chapter 11 at this time, 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,” Mr. Perez continued. “Our goal is to maximize value for stakeholders, including our employees, retirees, creditors, and pension trustees. We are also committed to working with our valued customers.<br>

“Chapter 11 gives us the best opportunities to maximize the value in two critical parts of our technology portfolio: our digital capture patents, which are essential for a wide range of mobile and other consumer electronic devices that capture digital images and have generated over $3 billion of licensing revenues since 2003; and our breakthrough printing and deposition technologies, which give Kodak a competitive advantage in our growing digital businesses.” <br>

Mr. Perez concluded, “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.”<br>

Kodak has taken this step after preliminary discussions with key constituencies and intends to work toward a consensual reorganization in the best interests of its stakeholders. Kodak expects to complete its U.S.-­‐based restructuring during 2013.<br>

The Company and its Board of Directors are being advised by Lazard, FTI Consulting Inc. and Sullivan & Cromwell LLP. In addition, Dominic DiNapoli, Vice Chairman of FTI Consulting, will serve as Chief Restructuring Officer to support the management team as to restructuring matters during the chapter 11 case.<br>

2<br>

More information about Kodak’s Chapter 11 filing is available on the Internet at www.kodaktransforms.com. Information for suppliers and vendors is available at (800) 544-­‐7009 or (585) 724-­‐6100.<br>

Kodak will be filing monthly operating reports with the Bankruptcy Court and also plans to post these monthly operating reports on the Investor Relations section of Kodak.com. The Company will continue to file quarterly and annual reports with the Securities and Exchange Commission, which will also be available in the Investor Relations section of Kodak.com.<br>

<strong>CAUTIONARY STATEMENT PURSUANT TO SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 </strong><br>

<em>This document includes “forward–looking statements” as that term is defined under the Private Securities Litigation Reform Act of 1995. Forward–looking statements include statements concerning the Company’s plans, objectives, goals, strategies, future events, future revenue or performance, capital expenditures, financing needs, plans or business trends, and other information that is not historical information. When used in this document, the words “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “forecasts,” or future or conditional verbs, such as “will,” “should,” “could,” or “may,” and variations of such words or similar expressions are intended to identify forward–looking statements. All forward–looking statements, including, without limitation, management’s examination of historical operating trends and data are based upon the Company’s expectations and various assumptions. Future events or results may differ from those anticipated or expressed in these forward-looking statements. Important factors that could cause actual events or results to differ materially from these forward-looking statements include, among others, the risks and uncertainties described under the heading “Risk Factors” in the Company’s most recent annual report on Form 10–K under Item 1A of Part 1, in the Company’s most recent quarterly report on Form 10–Q under Item 1A of Part II and those described in filings made by the Company with the U.S. Bankruptcy Court for the Southern District of New York and in other filings the Company makes with the SEC from time to time, as well as the following: the ability of the Company to continue as a going concern, the Company’s ability to obtain Bankruptcy Court approval with respect to motions in the chapter 11 cases, the ability of the Company and its subsidiaries to prosecute, develop and consummate one or more plans of reorganization with respect to the chapter 11 cases, Bankruptcy Court rulings in the chapter 11 cases and the outcome of the cases in general, the length of time the Company will operate under the chapter 11 cases, risks associated with third party motions in the chapter 11 cases, which may interfere with the Company’s ability to develop and consummate one or more plans of reorganization once such plans are developed, the potential adverse effects of the chapter 11 proceedings on the Company’s liquidity, results of operations, brand or business prospects, the ability to execute the Company’s business and restructuring plan, increased legal costs related to the Bankruptcy Filing and other litigation, our ability to raise sufficient proceeds from the sale of non-core assets and the potential sale of our digital imaging patent portfolios within our plan, the Company’s ability to generate or raise cash and maintain a cash balance sufficient to fund continued investments, capital needs, restructuring payments and service its debt; the Company’s ability to maintain contracts that are critical to its operation, to obtain and maintain normal terms with customers, suppliers and service providers, to maintain product reliability and quality, to effectively anticipate technology trends and develop and market new products, to retain key executives, managers and employees, our ability to successfully license and enforce our intellectual property rights and the ability of the Company’s non-US subsidiaries to continue to operate their businesses in the normal course and without court supervision. There may be other factors that may cause the Company’s actual results to differ materially from the forward– looking statements. All forward–looking statements attributable to the Company or persons acting on its behalf apply only as of the date of this document are expressly qualified in their entirety by the cautionary statements included in this document. The Company undertakes no obligation to update or revise forward–looking statements to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. </em><br>

###<br>

3</p>

 

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<p>OK now that I have spent an hour of my life reading through your links... there is still no direct reference that says Kodak is going to cease manufacturing film, which is what I asked for. As a matter of fact, here is a quote from one of your links that is opposite of what you say...</p>

<blockquote>

<p><strong>Does the Chapter 11 filing affect the selection of products that Kodak offers? </strong><br /> No. Offerings to customers will continue as usual. Kodak will continue to do what we have always done—bring products and services to market that help our customers do more, do it better, and do it faster. That will not change.</p>

 

</blockquote>

<p>No I believe they will probably try to sell off their film business in order to raise money, I figure someone will definitely buy it and make a run at a successful business.</p>

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<p> Yes, Blockbuster is still alive. Our local store is closed and the building sits empty. My son used to work there part time while he went to school. I did not rent movies however as they were to expensive. However I still see Blockbuster advertisements and such. I am not sure in what manner they are still alive. If it is a streaming business or what. I have Netflicks myself. </p>

<p> As far as Kodak goes I still do not see anything about film being dumped. However I believe it will be dumped unfortunately. Maybe that will give a shot in the arm to the other film companies. </p>

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