Kodak has announced that it and all of its subsidies have filed for Chapter 11 bankruptcy protection, in a move to restructure the company “to focus on its most valuable business lines” after years of ignoring the rise of digital cameras.
“Kodak is taking a significant step toward enabling our enterprise to complete its transformation,” Antonio M. Perez, CEO of Kodak, said in a statement.
“After considering the advantages of chapter 11 at this time, the Board of Directors and the entire senior management team unanimously believe that this is a necessary step and the right thing to do for the future of Kodak.”
The company has received a $950 million credit fund from Citibank in order to restructure the company, and hopes to continue to pay for wages and their benefits. However, how many jobs will be axed is another question – and could be large in number.
Kodak’s bankruptcy hasn’t come as a shock to many. The company ignored the trend of digital cameras, selling sub-par cameras in the highly competitive market. In comparison, companies like Sony, Canon, Samsung and Nikon made improvements in digital camera technology. Now, we have a camera on our phones, tablets and in slim form factors. In addition, the last year it had a profit was in 2007, and has now relied on its patents for some profits.
A question we should now look at is who will buy Kodak’s patents. Nortel’s patent portfolio was up for sale once it went bankrupt – and that got $4.5 billion from a consortium of companies that include Microsoft and Apple. A Bloomberg report hints at that Kodak’s patents are already worth $3 billion.
But who will buy them?
The very same Bloomberg report list Microsoft and Samsung as potential buyers. While a Microsoft seems weird (but hey, Google bought Motorola); a Samsung buyout does not. Just yesterday, Kodak accused Samsung for patent infringement, listing five patents. In addition, these patents could be handy in its global war against Apple, since Kodak is also accusing Apple (as well as RIM and HTC) for patent infringement.
Samsung could also be part of a consortium of other camera manufacturers to acquire these patents – especially since Kodak in recent years have become more aggressive on its patents.
While all this may be speculation, technology patents are highly critical now. So, whoever buys Kodak’s patents could become rich very quickly if they adopt a much more aggressive strategy.