The U.S. Bankruptcy Court has approved Kodak’s plan to exit bankruptcy, clearing the way for the company to emerge as a much smaller commercial printing business.
The emergence plan represents the last great hurdle for Kodak in its bid to exit bankruptcy.
Judge Allan Gropper approved the plan Tuesday and the company is hoping to put it into effect as early as September 3rd.
In a statement released by Kodak, the company quotes the court as saying:
“It will be enormously valuable for the Company to get out of Chapter 11, and begin to regain its position in the pantheon of American business.”
Matt Daneman, business reporter for Rochester’s Democrat and Chronicle, was at the hearing in New York city. He says once the plan is legally enacted a number of changes will occur.
“Existing stock would all be canceled out, and a whole new generation of shareholders, primarily a number of large financial institutions would be the new owners of Kodak.”
The sale of several of Kodak’s businesses would also be finalized, including its iconic film company. The company is also set to see a new lineup on the Board of Directors.
In a statement, Kodak Chairman and CEO Antonio Perez says this vital milestone marks the end of the court process for the company.
“Next, we move on to emergence as a technology leader serving large and growing commercial imaging markets – such as commercial printing, packaging, functional printing and professional services – with a leaner structure and a stronger balance sheet. There are additional transactional steps ahead as we complete our Chapter 11 restructuring, but with the Court’s decision today, our emergence is now imminent.”
Daneman says the plan has seen fierce objections from various shareholder groups, but the approval is the death knell for those cases. He says the court showed little patience for the claims that there is untapped wealth in Kodak that could be utilized to pay back shareholders.
“Today was really the last gasp for any kind of effort… really there’s nothing left, there are no really good foreseeable routes for shareholders to do anything but accept what’s coming down the pipe.”
Kodak will emerge as a much smaller business, and Daneman says they’ll have a completely new business plan to go along with their new legal and financial status.