Kodak declares suspension of payments to reorganize its activity

Kodak thus intends to avail itself of the protection offered by Chapter 11 of the US bankruptcy law to reorganize its activities.

Eastman Kodak, founded in 1888 and owner of more than a thousand patents in the photographic and film industry, announced this Thursday its decision to request the declaration of voluntary bankruptcy for the company's US parent company and subsidiaries before the New York courts.

Kodak thus intends to avail itself of the protection offered by Chapter 11 of the US bankruptcy law to reorganize its activities.

A través de esta reorganización, la compañía pretende rentabilizar sus derechos de propiedad intelectual no estratégicos, resolver la situación de su pasivo y concentrar sus esfuerzos en las líneas de negocio más rentables.

Recientemente, Citigroup había concedido un crédito de 950 millones de dólares a 18 meses que ahora estará sujeta a la aprobación por parte de los tribunales y otras condiciones previas.

Kodak, comandada desde 2005 por el español Antonio Pérez, confía en contar con liquidez suficiente para seguir operando mientras se encuentre bajo la protección del ‘capítulo 11’.

In a statement, Eastman Kodak has indicated that, despite the bankruptcy petition, it has sufficient capacity to operate its business and provide services to its customers “normally.”

Kodak expects to pay debts and salaries to its employees and pursue customer programs. On the other hand, subsidiaries outside the United States are not subject to these procedures and will comply with all obligations with their suppliers.

Continuous rumors about the company's viability at the beginning of the year caused its shares to fall by up to 30% on January 4, accumulating a depreciation of 91.53% in the last year.

How does it get here?

La actual situación de Kodak podría ser fruto de haber caído en dos de los cinco pecados que el economista Peter Drucker identificó en 1993 como “errores evitables que dañarán a las empresas más poderosas”.

El primero es “preocuparse solo por mantener altos márgenes de ganancia”. El segundo, “matar la oportunidad de mañana en el altar de hoy”.

Drucker creía que en lugar de enfocarse en los márgenes de ganancias, a una compañía le conviene prestar atención a las ganancias totales, que salen del margen de ganancias multiplicado por volumen de ventas. Es esta cifra, sostenía, lo que asegura “una posición óptima en el mercado”.

For decades the negative, professional and consumer, supported almost all of Kodak's business. The emergence of digital meant the entry of new players into a preserve that until now had been reserved for Kodak itself and its eternal competitor Fujifilm.

Without a doubt, the biggest mistake was not identifying that the future of the profitable photochemical business would sooner or later end up focusing profits on a business that was doomed to die.

A decade ago, the company already attempted a pivot towards digital, moving clumsily in a market with fierce competition in which the concept of a consumable (the popular reel, in consumption) was no longer necessary. Although it entered the digital camera market, achieving a very good position in the North American market, the company's ossified structure did not allow it to play in a universe as dynamic and constantly changing as the digital one.