Kodak in $2.8 Billion Spinoff Accord With Pension PlanDavid McLaughlin and Ben Moshinsky
Eastman Kodak Co., the bankrupt photography pioneer, will spin off imaging businesses to its U.K. pension plan in a deal that settles $2.8 billion in claims against the company.
Kodak’s personalized- and document-imaging businesses will be spun off for $650 million to the pension plan, Kodak’s largest creditor in the bankruptcy case, the company said today in a statement.
Kodak, based in Rochester, New York, said it plans to file its plan tomorrow to reorganize and exit court protection. The spinoff accord settles about $2.8 billion of claims by the pension plan against Kodak, it said in the statement.
“It’s quite a precedent” for a U.K. pension plan to acquire a business from a U.S. company, Steven Ross, chairman of Kodak’s U.K. plan, said in a telephone interview. “I don’t think it’s been done.”
Kodak said this month that it had a deal to sell the document-imaging business, which includes scanners, to Japanese office-equipment company Brother Industries Ltd. for about $210 million. Kodak today withdrew its request filed in court to auction the assets with Brother leading the bidding.
Kodak is selling businesses to shrink and fund its shift into commercial printing and packaging after filing for court protection in January 2012. The personalized-imaging business includes retail photo kiosks and photographic paper.
Ross said the U.K. pension plan is “a very stable long-term owner of assets.”
“We’ll put in place a strong governance structure and appoint the right executive board to run the business going forward,” he said. “We’ll exercise our rights as shareholders in a responsible manner.”
The bankruptcy case is In re Eastman Kodak Co., 12-10202, U.S. Bankruptcy Court, Southern District of New York (Manhattan).