19 Jan 2012

Kodak files for bankruptcy

The 130-year-old company, which invented the hand-held camera, files for bankruptcy protection in the US after years of falling sales.

The pioneering Eastman Kodak Company, which brought the world the first pictures taken on the moon, has filed for bankruptcy in a bid to survive a financial crisis following its failure to develop new products in a changing photography market.

The photographic film company said in a statement that it had been given a $950m (£615m) loan from the credit facility Citigroup for 18 months and added that it would try to keep business as usual for its customers.

The loan and bankruptcy protection from US trade creditors may allow Kodak time to find buyers for some of its 1,100 patents, which would boost its value.

The company had tried to develop more commercial products, such as digital cameras, led by Chairman and Chief Executive Antonio Perez, but that had failed to boost its annual profitability.

Photo gallery: a history of Kodak snaps

Kodak and its US subsidiaries have filed for Chapter 11 business reorganization in the US bankruptcy court. But it said that non-US subsidiaries were not included.

Kodak employs 17,000 workers, and Mr Perez said it would continue to pay their wages while trying to reorganise and restructure the company.

“Now we must complete the transformation by further addressing our cost structure and effectively monetising non-core intellectual property assets,” said Mr Perez. “We look forward to working with our stakeholders to emerge a lean, world-class, digital imaging and materials science company.”

At the end of September, Kodak had total assets of $5.1bn and liabilities of $6.75bn.

Kodak had once dominated the photography industry but it failed to beat competitors in developing new technologies such as the digital camera – even though it invented the original product.

Over the last few years, Kodak has tried to sue rivals such as Apple Inc, BlackBerry makers Research in Motion Ltd ,and Taiwan’s HTC Corp over its patents.

Kodak film was once the subject of a Paul Simon song, and in 1969 Neil Armstrong used a Kodak camera the size of a shoebox to take pictures when he became the first man to walk on the moon.