Eastman Kodak, the photography pioneer that introduced the Brownie camera more than a century ago, filed for bankruptcy Thursday after consumers...
NEW YORK — Eastman Kodak, the photography pioneer that introduced the Brownie camera more than a century ago, filed for bankruptcy Thursday after consumers embraced digital cameras, a technology Kodak invented and failed to commercialize.
The Rochester, N.Y., company, which traces its roots to 1880, listed assets of $5.1 billion and debt of $6.8 billion in Chapter 11 documents filed in U.S. Bankruptcy Court in Manhattan.
“They were a company stuck in time,” said Robert Burley, an associate professor at Toronto’s Ryerson University who has photographed shuttered Kodak facilities in the U.S., Canada and France since 2005. “Their history was so important to them, this rich century-old history when they made a lot of amazing things and a lot of money along the way. Now their history has become a liability.”
The company’s credit deteriorated as revenue tumbled from traditional film, and the inventor of the Instamatic cameras was slow to compete with Canon and Hewlett-Packard in digital cameras and printers.
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Citigroup agreed to provide a $950 million debtor-in-possession loan to help Kodak operate during bankruptcy, the company said Thursday. The loan must be approved by a bankruptcy judge.
“Kodak is taking a significant step toward enabling our enterprise to complete its transformation,” said Antonio Perez, chief executive officer.
The company plans to sell “significant assets” during the bankruptcy, Chief Financial Officer Antoinette McCorvey said in a court filing. She didn’t elaborate.
As it watched digital dissolve its high-margin film business, Kodak has shed 47,000 employees since 2003, closing 13 factories that produced film, paper and chemicals, along with 130 photo laboratories. The restructuring has already cost $3.4 billion.
Kodak, headed for its sixth annual loss in the past seven years, tried to sell more than 1,100 digital-imaging patents and pursued royalties to fund a shift to modern commercial and consumer-digital printers.
Kodak’s cash and equivalents fell to $862 million at the end of its third quarter from $1.4 billion a year earlier. The company is scheduled to report fourth-quarter results Jan. 26.
Kodak’s revenue has fallen by half since 2005 to $7.2 billion last year, with further declines predicted this year and next after film- and photofinishing-unit sales sank by 14 percent in the second quarter. The company’s losses since 2008 exceeded $1.76 billion.
The Bank of New York Mellon is listed as Kodak’s biggest unsecured creditor as trustee for about $670 million of unsecured notes. Other unsecured creditors include Sony Studios, which is owed $16.7 million, Warner Brothers, with $14.2 million, and Alcoa, with $2.8 million.
Perez, a former Hewlett-Packard executive who took charge at Kodak in 2005, tried to rescue the brand by cutting costs and winning shelf space for inkjet printers at Wal-Mart Stores and Staples. He pushed its commercial digital printers into publishing and packaging.
Kodak hasn’t sold enough printers and presses to create sufficient demand for replacement ink and supplies and service contracts to end losses in those units. In February, it projected operating profits in consumer and commercial inkjet printing by the end of 2013.
“Out of the bankruptcy proceedings, a much smaller company can emerge,” said Don Strickland, a former Kodak vice president for digital imaging. “But I really don’t believe that there’s going to be another Kodak moment.”
Kodak recently stepped up its campaign to extract more cash from its patent portfolio. The company on Wednesday sued Samsung in a case that claims the Galaxy tablet infringes technology for capturing and sending digital images. Last week the company sued HTC and Apple and also has cases against Research In Motion and Fujifilm.
Kodak was founded by George Eastman, who developed a method for dry-plate photography before introducing the Kodak camera in 1888, according to the company’s website. It went on to invent film, enabling Thomas Edison to develop the motion-picture camera, as well as Brownie cameras selling for $1 and Kodachrome film.
The company also invented the first digital camera in 1975, which it shelved because it would threaten its lucrative film business, Perez said in March.
“Like many other companies on the East Coast, Kodak has been phenomenal in research and patents and not so good commercializing things, actually terrible commercializing things,” Perez said.