Eastman Kodak Co. won court approval for creditors to vote on the photography pioneer’s plan to reorganize and exit bankruptcy protection by selling $406 million of stock.
Kodak can move forward with its restructuring by sending the proposal to creditors for consideration, U.S. Bankruptcy Judge Allan Gropper in Manhattan said today at a hearing.
Kodak, based in Rochester, New York, filed for bankruptcy in January 2012 and is reorganizing around its commercial imaging business. The company is scheduled to return to court Aug. 20 for approval of the bankruptcy plan.
The proposal hinges on the rights offering for 85 percent of the equity of the company backstopped by a creditor group that includes GSO Capital Partners and BlueMountain Capital Management. Kodak also plans to rely on $895 million in loans to finance the bankruptcy exit.
The plan pays unsecured creditors with estimated claims of from $1.6 billion to $2.2 billion a recovery of as much as 5 cents on the dollar, according to court papers. Existing stock will be canceled.
The bankruptcy case is In re Eastman Kodak Co., 12-bk-10202, U.S. Bankruptcy Court, Southern District of New York (Manhattan).