NEW YORK--A judge on Friday approved changes to Eastman Kodak
Co.'s (EKDKQ) bankruptcy financing that gives the company more
flexibility of time and money as it continues its pursuit of a
Chapter 11 exit plan that would keep it viable.
Judge Allan L. Gropper of the U.S. Bankruptcy Court in Manhattan
approved the changes at a quick hearing Friday, also allowing the
company to file some of the paperwork describing the changes
confidentially.
The financing, from a group of the company's second-lien lenders
including Silver Point Capital LP and Contrarian Capital Management
LLC, is an amendment to their $843.7 million loan approved by Judge
Gropper in January. Many of the terms are undisclosed.
Judge Gropper's approvals Friday essentially allowed Kodak to
pay the lenders fees related to the changes, which include lowering
the amount of cash Kodak must generate from selling off its
non-commercial imaging businesses to $600 million.
The changes also give Kodak greater flexibility in converting
the loan to the exit financing it would need to emerge from
bankruptcy. The company hopes to have a plan confirmed by the court
by the end of June and to be out of Chapter 11 by the middle of
September.
"It's an important day," said Akin Gump Strauss Hauer & Feld
LLP's Michael S. Stamer, a lawyer for the lenders. Mr. Stamer also
said that discussions on a reorganization plan--who will own Kodak
when it comes out of bankruptcy, how creditors will be paid back
and how it will move forward as a company--have already begun. The
changes also call for Kodak and the lenders, along with the
company's official committee of unsecured creditors, to work
together in selecting members of the reorganized company's board of
directors.
While the company hasn't yet filed an official reorganization
plan, Kodak has laid out the backbone of a proposal by selling a
trove of digital patents for $527 million and securing the
second-lien lenders' financing.
After it filed for bankruptcy protection in January 2012, Kodak
continued in earnest to sell the digital patents, which it hoped
would fetch more than $2 billion. As time went on and it became
clear those patents would sell for much less, Kodak began to shut
down or put up for sale many of its once-core businesses, including
ending its consumer-printing business and shopping its photo kiosk,
scanner and camera-film units.
It has also gotten out of its once-iconic camera business,
having recently signed a brand-licensing agreement with JK Imaging
Ltd. that will allow JK to make digital cameras and projectors with
the Kodak name.
The changes have resulted in thousands of layoffs at Kodak, and
the company has cut retiree benefits.
In a January presentation to creditors made in a public filing,
Kodak provided an outline of its now-core commercial-imaging
business. That business will be split into two main segments:
graphics, entertainment and commercial film, and digital printing
and enterprise.
Dow Jones Daily Bankruptcy Review covers news about distressed
companies and those under bankruptcy protection. Go to
http://dbr.dowjones.com)
Write to Joseph Checkler at joseph.checkler@dowjones.com. Follow
him on Twitter at @JoeCheckler
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