official late last night and filed a voluntary Chapter 11 business reorganization. Citigroup will provide $950 million in debtor-in-possession financing. As we had stated, the company’s liabilities were to great, its ability to monetize intellectual and real property too slow, and its digital and other new operations not developing quickly enough to avoid this outcome.
We continue to believe that Kodak will emerge from the bankruptcy as a strong, but smaller company, having shed the liabilities that strangled it, having disposed of non-core assets, and having retained those parts of the company with the best prospects. It is important to note that current shareholders will not participate in this and that their shares are worth zero. Inevitably in a bankruptcy, a robust market continues in the company’s shares despite the fact that there are very few cases when shares of bankrupt companies retain value (one recent example would be SYMS (SYMSQ.PK)). This will not be an exception to the rule. Those who own Kodak ought to sell and salvage what they can, those who don’t should not buy. Our sympathy is with Kodak employees, vendors and partners during this difficult time. We hope that the company’s reorganization and eventual emergence in 2013 will remove the clouds of uncertainty and create new growth and new opportunities.
Disclosure: The author owns shares in SYMSQ.PK.