Kodak granted court OK of procedures for 'Kodak Gallery' business sale

By Caroline Salls

Pittsburgh, March 22 - Eastman Kodak Co. received court approval of the bid procedures for the proposed $23.8 million sale of Kodak Imaging Network, Inc.'s "Kodak Gallery" business assets, according to a March 22 filing with the U.S. Bankruptcy Court for the Southern District of New York.

The company said Kodak Gallery is an online-based photo sharing and merchandise service that is no longer an important component to its business strategy.

Shutterfly, Inc. is the stalking horse bidder.

Kodak said in the motion that the purchase price would be paid in two installments, including a $19.04 million installment on the closing date and a $4.76 million installment two business days following a transition end date.

If Shutterfly is not the high bidder, Kodak will pay it a $250,000 break-up fee.

Preliminary bid documents are due by 10 a.m. ET on April 3, and final bids are due by 10 a.m. ET on April 20.

After provision for the break-up fee, competing bids must exceed the value of the stalking horse bid by at least $500,000.

The auction will be held on April 26. The first bid at auction must be for at least $500,000 more than the starting bid, and subsequent bids must be made in minimum increments of $200,000.

The sale hearing is scheduled for April 30.

Kodak is a Rochester, N.Y.-based imaging technology products and services provider to the photographic and graphic communications markets. The company filed for bankruptcy on Jan. 19. Its Chapter 11 case number is 12-10202.

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