Struggling Eastman Kodak said Thursday that it and its U.S. subsidiaries have filed for Chapter 11 of the U.S. Bankruptcy Code to reorganize its business.
In November, the company lowered its revenue outlook for 2011 to up to $6.4 billion, and said it expected losses in 2011 in the range of $400 million to $600 million from continuing operations. It reorganized its business structure earlier this month.
The company said in a statement that it and its U.S. subsidiaries filed voluntary petitions for Chapter 11 business reorganization in the U.S. Bankruptcy Court for the Southern District of New York.
In a bid to raise cash, the company has since July been “exploring strategic alternatives” including sale for its digital imaging patent portfolios to take advantage of increased demand for intellectual property. It said it had over 1,100 U.S. patents that are fundamental to the digital imaging industry.
Kodak evidently wants to take advantage of the frenzy to buy patents in the tech industry, which led for example to a consortium that included Apple, EMC, Ericsson, Microsoft, Research In Motion, and Sony to pay $4.5 billion for patents and patent applications of Nortel Networks last year. Google also announced in August that it would acquire Motorola Mobility for $12.5 billion with an eye to its patents.
The storied photography company said on Thursday that Chapter 11 gives it the best opportunities to maximize the value in two critical parts of its technology portfolio—its digital capture patents, and its printing and deposition technologies.
Its digital capture patents, which are essential for a wide range of mobile and other consumer electronic devices that capture digital images, have generated over $3 billion of licensing revenues since 2003, the Rochester, New York company said.
Kodak claims to have licensed its digital imaging patents to more than 30 companies, including LG, Motorola, and Nokia.
Kodak on Wednesday filed a lawsuit against Samsung alleging infringements of its patents related to digital imaging technology. It filed similar lawsuits last week against Fujifilm, Apple, and HTC, and also complained to the U.S. International Trade Commission alleging infringements by Apple and HTC of its digital imaging technology
Kodak expects to complete its U.S.-based restructuring during 2013. It has closed 13 manufacturing plants and 130 processing labs, and reduced its workforce by 47,000 since 2003, as it exited from its traditional operations to creating a digital business.
“The business reorganization is intended to bolster liquidity in the U.S. and abroad, monetize non-strategic intellectual property, fairly resolve legacy liabilities, and enable the company to focus on its most valuable business lines,” it said in a statement.
Kodak believes that it has sufficient liquidity to operate its business during Chapter 11, and to continue the flow of goods and services to its customers in the ordinary course.