Photography pioneer Kodak files for Chapter 11

Kodak filed for bankruptcy under Chapter 11 of the US regulations around insolvency last night, UK time.

Overseas subsidiaries are not included in the filing, and customers and resellers will continue to be served in the interim, according to a statement from the company.

The 131-year-old Eastman Kodak Company and its US subsidiaries have commenced a voluntary Chapter 11 petition for business reorganisaton, it said.

Antonio M Perez, chairman and chief executive officer of Kodak, said the step was necessary for the firm's survival.

"At the same time we created our digital business, we also already effectively exited certain traditional operations, closing 13 manufacturing plants and 130 processing labs, and reduced our workforce by 47,000 since 2003," Perez stated.

"Now we must complete the transformation by further addressing our cost structure and effectively monetising non-core IP assets."

Perez said the firm intends to emerge as a lean, world-class, digital imaging and materials science company. "The entire senior management team unanimously believe that this is a necessary step," he said.

He added that he believes that Chapter 11 will allow Kodak to continue to reap benefits from its digital capture patents, which are essential for a wide range of mobile and other consumer electronic devices and have generated $3bn in licensing revenues since 2003, and its printing and deposition technologies.

It generated 75 per cent of its revenue from digital businesses in 2011.

The US restructuring is expected to end in 2013. Meanwhile, it must file monthly in the New York bankruptcy court.

So far, Kodak has secured $950m in debtor-in-possession financing, which matures in 18 months, from Citigroup in the US, the firm said.

Several days ago, the company filed patent infringement notices against Samsung and FujiFilm. Kodak UK is its largest overseas subsidiary, based out of Hemel Hempstead.

According to Bloomberg newswire, the Bank of New York Mellon is Kodak's biggest unsecured creditor, to which it owes $668m. Other unsecured creditors include Sony Studios, Warner Brothers and Alcoa.

The Bank of New York Mellon is also the largest secured creditor, for $776m. All Kodak's US assets back this claim, according to the newswire.