Kodak Files for Chapter 11 Bankruptcy Protection
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Kodak Files for Chapter 11 Bankruptcy Protection

January 19, 2012

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Eastman Kodak Co., perhaps the most important film company of the last 50 years, filed for Chapter 11 bankruptcy today, according to a number of different media outlets.

In recent reports, reporters observed that Kodak’s well-publicized financial difficulties has pushed them into bankruptcy, as the company needs to reorganize its finances.

The 131 year old media company also is said to have received $950 million in financing from Citigroup to keep the business alive amidst the financial restructuring period.

The numbers showing Kodak’s ills are staggering. The company, for example, employed more than 140,000 people in 1988. This year, it had slightly more than 18,000 workers.

In 1996, before the digital revolution that struck at the heart of the company’s film-based business model, each stock of Kodak was worth a healthy $80 per share. Today, a brave (if unwise) investor could find a share of Kodak stock for less than 50 cents.

Sources indicate that Kodak’s dramatic fall is mostly a result of the company’s failure to capitalize on the digital age. Years ago, Kodak had almost 80 percent of the American film market.

Today, as more people turn to digital devices, the company’s stronghold on the film market is no longer a recipe for riches. Oddly, though, Kodak’s own engineers are credited with inventing the first digital camera in 1975.

Kodak, however, failed to market and sell its own digital cameras, and quickly lost market share to companies like Canon, Nikon, and Sony, who dominate today’s digital market.

Of course, these companies now have to compete with mobile phone companies that are embedding increasingly powerful digital cameras into their own devices. So, even if Kodak had capitalized on the digital revolution, it may still be facing financial woes due to the fierce competition that dominates the market for digital tools, particularly picture-taking devices.

Despite Kodak’s current woes, experts believe that the company still has time to reinvent itself, and with cooperation with bankruptcy attorneys. The company, for example, still owns roughly $3 billion worth of digital imaging patents, which could theoretically be sold to other businesses, although Kodak has yet to find any takers.

Kodak could also begin marketing new products, although its efforts to sell digital cameras and print digital pictures have thus far been a failure.


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