Eastman Kodak Company recently announced a comprehensive settlement agreement with the U.K. Kodak Pension Plan (KPP), its largest creditor, with respect to its Chapter 11 Plan of Reorganization. Under the agreement, which will be filed with the U.S. Bankruptcy Court, Kodak’s Personalized Imaging and Document Imaging businesses will be designed under new ownership to KPP.
The settlement agreement provides, among other things, for the spin-off of Kodak’s Personalized Imaging and Document Imaging businesses to KPP for cash and non-cash consideration of $650 million. Certain proceeds will be used to support the emergence of Kodak from Chapter 11 and the growth of its Commercial Imaging business. The agreement also settles approximately $2.8 billion of claims by KPP against Kodak and certain of its affiliates.
“The KPP transaction moves us past several key obstacle in our reorganization, resolving all potential claims worldwide, assuring continued operations outside the US, placing our Personalized Imaging and Document Imaging businesses with a new owner that recognizes their value and is focused on their growth and success, and providing the remaining liquidity we require to emerge from Chapter 11. We are pleased with the transaction, the value it creates for our stakeholders, and the dedication and creativity of KPP that made it possible to achieve this extraordinary result.” said Antonio M. Perez, Kodak Chairman and Chief Executive Officer
Steven Ross, Chairman of KPP, said, “KPP and Kodak have been working collaboratively since the beginning of the case, and this acquisition provides security for and delivers the greatest value to, the KPP members. Overall, this settlement gives members improved future prospects whilst being good for Kodak’s employees, its creditors and for UK businesses. The businesses that are being acquired will deliver long-term cash flows to support the plan’s obligations. The financial stability that KPP will provide for the Personalized Imaging and Document Imaging businesses will be beneficial to businesses’ employees, customers and partners.”