Kodak files reorganization plan, expects to emerge in third quarter

By Caroline Salls

Pittsburgh, May 1 - Eastman Kodak Co. filed its plan of reorganization and related disclosure statement on April 30 with the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, the company reached a comprehensive settlement with its largest creditor, the U.K. Kodak Pension Plan. The settlement includes the spin-off of Kodak's personalized imaging and document imaging businesses and settles $2.8 billion in claims.

Kodak said it expects the court to schedule a hearing on the disclosure statement for mid June.

The company expects to emerge from Chapter 11 restructuring in the third quarter.

"The filing of the plan of reorganization and disclosure statement represents a major milestone in our reorganization: this initiates our emergence process," chairman and chief executive officer Antonio M. Perez said in a company news release.

"We now have a clear path forward for Kodak, and we are positioning the company for a profitable and sustainable future.

"Through the actions we have taken, Kodak has successfully fulfilled the four primary objectives for its Chapter 11 filing - bolstering liquidity, monetizing non-strategic intellectual property, fairly resolving legacy liabilities and focusing on our most valuable business lines."

Creditor treatment

Treatment of creditors under the proposed plan will include the following:

• Second-lien noteholders will receive cash equal to unpaid interest as of the plan effective date at the non-default contract rate applicable when Kodak filed for bankruptcy and a number of shares of new common stock equal to the outstanding principal amount of the notes multiplied by 0.09066667;

• Holders of general unsecured claims and retiree settlement unsecured claims will receive a share of new common stock equal to the holder's share of an unsecured creditor pool;

• Holders of KPP claims will be treated in accordance with the global settlement;

• Holders of convenience claims will receive cash for an undetermined recovery;

• Holders of subsidiary convenience claims will be paid in full in cash, capped at a total of $300,000;

• Holders of equity interests and section 510(b) claims will receive no distribution;

• Other priority claims will be paid in full in cash; and

• Holders of other secured claims will either be paid in full in cash, received the collateral securing their claims or receive another treatment that renders the claims unimpaired.

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, 2012 under Chapter 11 case number 12-10202.

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