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It's only Chapter 11.


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<p>Mr. Ellingson:<br>

You said you were a bankruptcy attorney, yes?</p>

<p>(Forgive me for not posting cites because Kodak has since been de-listed from the NYSE and all the news is keyed to the ticker symbol)<br>

Sir:<br>

There was a news item that had the Citibank lawyer riping Kodak's management a new one saying something to the effect of - you burned through 2 billion dollars in a year (IIRC) what makes you think that our $950 million will save you?</p>

<p>A Harvard' B' or law school professor said that in his opinion, Kodak is headed for liquidation.</p>

<p>I don't understand. Citi gave Kodak its current line of credit and yet it sounds like they think it's going belly up. If I thought a company was going to be liquidated, I wouldn't have gave them a line of credit.</p>

<p>Would you be so kind as to clarify for us how this can happen - the bank giving money to a company that they think will eventually have to liquidate?</p>

<p>Thank you.</p>

 

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<p>Hmm, I shoot film because I love the workflow of film. After working in front of a computer the whole day, time away from computer screen is a welcome boon. I can change the film and get different look. All said and done, computer ergonomics and screen glare are still not upto the mark. <br>

Personally, I love film and hope it stays. Hope Kodak comes out of this a winner. I have a relative working in Indian movies industry and they still use films ( Kodak especially) and have not heard much of any changes to that. They do have devices where they can replay the shot and see how it came out.</p>

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<p>Sanjay: I no longer work with film, but did and do love it. I think if it is going to stay alive it will have to be supported as a cottage industry by people like you. I think the hard reality of the marketplace means that the Kodaks of the world are going to look for larger and more profitable markets in the future.</p>
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<p>I'm almost sorry I started this thread because off some of the personal attacks I've read. I guess I shouldn't have inserted the comment about "film-haters". Next time when I start a thread, I'll leave out the wisecracks. I just hope negative film stays around. I've got a beautiful Hasselblad that now has relatively little re-sale value.</p>
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<p>Rick:<br>

Kodak is estimated to have about $3 billion in assets. New money that comes in after the bankruptcy filing (typically arranged before the filing). The new money (DIP financing) is given priority over all other creditors. That means in this case that Citi has $3 billion in security to back its $950 million financing -- along with a lot of hooks on the way. Typically in these settings the DIP financing may have lined up buyers or additional investors for the restructure business. This was CitiCorp Global, not the bank that did this. My guess is that they see value in the patents and printing business that they can make a high rate of return on this loan.</p>

<p> </p>

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<blockquote>

<p>That means in this case that Citi has $3 billion in security to back its $950 million financing -- along with a lot of hooks on the way. Typically in these settings <strong>the DIP financing may have lined up buyers or additional investors for the restructure business.</strong></p>

</blockquote>

<p>So in other words ... if some company thinks that Kodak's film business is worth buying, they can do so?</p>

<p>Yes, I'm guarding my words here ... I don't want to seem like a Troll and yet, I want to learn something.</p>

<p>Yes, sir - I can guarantee that you will get impatient with me.</p>

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<p>Possibly, but it would be tough at this point to buy that film business. First, Kodak shut down most of they film operation and laid off the employees (47,000 of them). Second, what was left was divided up between the two remaining divisions and it would probably be tough to put back together into a package to sell to anyone. To the extent that Kodak has remaining market share, Fuji or one of the other providers is probably going to try to capture that. Third, Citi and the other creditors are not focused on the film business, but on the digital patents and the printing business and will not be marketing the film assets -- what are left of them. <br>

I want to make clear I don't hate, Kodak, film or anyone here. I think everyone's children are smart and their dogs are cute.</p>

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<blockquote>

<p>Fuji or one of the other providers is probably going to try to capture that.</p>

</blockquote>

<p>Yes sir.<br /> Someone by the name of "Doug" posted an "Economist" article that basically stated that FujiFilm will basically milk the film business while it declines and when it runs into a loss, they will disband it.</p>

<p>So, I still don't understand why a some company that thinks that film will die would invest or at least loan money to it.</p>

<p>Or are your saying that if Kodak tanks, Fuji will capture their market share?</p>

<p> </p>

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<p>Seems like there are some very astute individuals on this thread that have a wide experience in finance and law. Who can see deeper into the crystal ball on this issue of the troubled Kodak? Truth is regardless of our worldly experience of finance, we're all trying to see into a crystal ball. Perhaps at this juncture there is an injustice to the contributors on this thread, in that the real red meat news is still to follow. I cant imagine that anyone contributing to this thread would like to see film go away. If someone does, then you're just confused, or not a Photographer. Their have been comments made on this issue of films place in this world, that allude to its demise. Now, the last time I checked, living in the United States, meant one of the privileges was having a, "<strong>choice</strong>," in the marketplace. I'm just literally imagining what it would be like to <strong>not </strong>have that choice. I hope the financiers working on this have the same compass as I do. Film & Digital. </p>
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<p>Ah, I see. Yes, I'd misinterpreted what you said.</p>

<p>Kodak goes bust and Fuji gets the spoils?</p>

<blockquote>

<p>Third, Citi and the other creditors are not focused on the film business, but on the digital patents and the printing business and will not be marketing the film assets -- what are left of them.</p>

</blockquote>

<p><em><strong>But I have to wonder if someone is.....</strong></em></p>

<p>Put your lawyer hat on my dear sir; who would buy Kodak's film business?<br /> IIford-Harman? NO. cannibalizing their existing business.</p>

<p>Foma? Maybe.</p>

<p>FujiFilm? NFW! They stated that they're going to milk the biz and shut it down!<br /> Who else??<br /> <em><strong><br /></strong></em><br /> I'm beginning to see why vulture investors get the returns they do.</p>

<p>Come on John! Help us wipper snappers!</p>

<p><strong>There was a time when aged ones were held in high regard - and for good reason!</strong></p>

<p> </p>

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<p>I don't think anyone would buy Kodak's remnant of their film business. First, as I said earlier, Kodak had really ramped down the business closing all those facilities and laying off 47,000 employees. Next they divided the remaining carcass up between the two surviving business units and not as a core function of either.<br>

Think for a minute if you were Ilford, Fuji, or Agfa... why would you buy anything instead of trying to fill the vacuum left by Kodak? Why would any new investor get into a business that Kodak is aggressively winding down only to compete with the Fuji types in a market that has been moving from film to digital for some time?</p>

 

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<blockquote>

<p>Think for a minute if you were Ilford, Fuji, or Agfa... why would you buy anything instead of trying to fill the vacuum left by Kodak? Why would any new investor get into a business that Kodak is aggressively winding down only to compete with the Fuji types in a market that has been moving from film to digital for some time?</p>

 

</blockquote>

<p>Now you're cooking pops!<br>

I can't think of anything at all. I'm just some young pup who, in his own opinion - that I won't mention here because I'd be accused of being a "Troll" - but for the life of me, you old timers have seen it all and <strong>this has happened before in another industry</strong>.</p>

 

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<p>I could imagine Fugi or someone buying the name and trademarks (logo and yellow box), if the price was right and they thought it could get them market share in the short term. But all of the film companies have huge amounts of excess capacity, and would have no need to buy factories or other production type assets.</p>
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<p>I for one love Kodak's films, especially Tri-X. I do hope that they will recover from this and continue to produce film. One of my problems with Kodak is that they discontinued their excellent dark room papers. Supplying traditional photographers with film but not paper is a marketing mistake. I have some old boxes of Polymax Fine Art Fiber and it is a beautiful paper to print with.</p>
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<p>So much speculation. Let's face it, much of the outcome depends upon the Master appointed by the Bankruptcy judge.<br>

FYI: I personally had once opined that if Kodak made their own film scanners with great software for their films, and sold at cost or below cost, maybe they would have been in better shape. Or maybe not. I once posed that idea to someone at Kodak, but it was shot down as too expensive.<br>

Another FYI: Recently, I got some prints made from film at a big drug store chain. Total crap came out. I can see why so many typical snap-shooters have quickly embraced digital. My guess is that a low-cost digital camera spitting out jpegs can give a snap-shooter better results than the crap coming out of a drugstore minilab.<br>

And one more FYI: Have you noticed that used Leicas appear to be selling for less than one year ago. I don't have hard data to back that up. Only what I've noticed at used camera sites and flea-bay. Could that be a market signal?</p>

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<p>Yes they made their litany of mistakes, and in spite of those mistakes, their film division made money. So with that model in mind, they certainly could create a monster of success by simply paying attention to the business their in by reorganizing and complimenting the customer base that made the film division a success. </p>
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