Posted: Aug 20, 2013 1:47 PM
Updated: Aug 20, 2013 1:48 PM
NEW YORK (AP) A federal judge has approved Kodak's plan to emerge from bankruptcy protection.
Judge Allan Gropper's ruling paves the way for the photography pioneer to emerge from court oversight as a new company focused on commercial and packaging printing. The company has said it hopes to emerge from bankruptcy protection on Sept. 3.
Founded in 1880, Eastman Kodak Co. filed for bankruptcy protection last year after struggling with increasing competition, the shift from film to digital photography and growing debt levels. Since its filing, Kodak has sold off many of its businesses and patents.
"Kodak is a different company that the one in the popular imagination and very different from the one that filed for bankruptcy," Kodak attorney Andrew Dietderich told the court in seeking approval for Kodak's bankruptcy-exit plan.
Last week, a majority of the company's shareholders voted to approve its plan to emerge. But some retirees, shareholders and other parties have objected to it.
Although shareholders argued that they should be entitled for something in exchange for their stock, Gropper said he ruled at a previous hearing that they weren't. He noted that the company's creditors will only receive 4 cents or 5 cents on the dollar for their investments and that they're entitled to be paid before shareholders are. Generally, holders of common stock do not receive anything for their shares when a company emerges from Chapter 11.
The U.S. Trustee has also filed an objection challenging the legality of hefty cash and stock bonuses that Kodak executives are expected to receive when the Rochester, N.Y., company exits from bankruptcy protection.
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