Thu January 30, 2014
Some Companies May Face Lawsuits As A Result Of The Kodak Bankruptcy
A Trustee fund which is overseeing the aftermath of the Kodak bankruptcy has filed more than 100 lawsuits against former vendors, in an attempt to get back some of the money Kodak paid them just before the company filed for bankruptcy. The lawsuits were filed this month in federal bankruptcy court, and a handful of them seek more than a million dollars. Whatever money the special trust fund collects would be divided up among the unsecured creditors.
Brighton Securities President George Conboy says this is a pretty common situation when you have a bankruptcy involving a large company.
"Unsecured creditors got about a nickel on the dollar and so the residual claims that may bring in a little bit more money will be pursued, and if they can get some more money back, they'll make another distribution to unsecured creditors, I don't think it'll be too much."
Conboy says the courts can allow the special trust fund to collect money paid by Kodak to vendors during the three months prior to the time it filed for bankruptcy. He says this would not impact the regular payments Kodak made, for instance, payments to a utility.
Conboy says the unfortunate part here is that some small businesses could get especially impacted if they have to return money to the trust fund. In a statement Kodak said the trust fund is an independent third party acting on behalf of the unsecured creditors,and it has no control over its actions.Kodak emerged from bankruptcy last September.
Kodak says it does not expect these lawsuits to cause any further problems with its suppliers.