Kodak Exiting Bankruptcy, Claims to Be on Path Toward Profits

Eastman Kodak Co. (EKDKQ) is just about to be a new company, with a new direction under the same CEO, and without the burdens of its financial disaster of a past. This story has felt like a never-ending bankruptcy that was a train wreck taking more than a full decade to unfold. Just do not forget that the pre-bankruptcy shares will imminently be worthless.

The company says that it has completed the final steps in its Chapter 11 restructuring process. This includes the spin-off of its Personalized Imaging and Document Imaging businesses to Kodak Pension Plan, which is now listed as a “longstanding pension plan of Kodak's U.K. subsidiary.” What is more important is that Kodak claims to have successfully closed on its agreement for $695 million in term exit financing, paid off its DIP lenders and second lien noteholders in full, and completed its rights offerings.

The long and short of the matter is that Kodak took in approximately $406 million of new equity investments from participating unsecured creditors. Where this gets a bit more murky is in the post-bankruptcy outlook. Antonio M. Perez, who is still somehow and amazingly Kodak’s Chairman and Chief Executive Officer, was quoted in the SEC Filing as saying,

We have emerged as a technology company serving imaging for business markets — including packaging, functional printing, graphic communications and professional services. We have been revitalized by our transformation and restructured to become a formidable competitor — leaner, with a strong capital structure, a healthy balance sheet, and the industry's best technology … We are setting a trajectory for profitable growth. We have the right technology at the right time as printing markets increasingly transition to digital. Our broad portfolio of offset, hybrid and digital solutions enables customers to make the transition at their chosen pace using our breakthrough technology solutions.

Did that really say “Profitable Growth” in there? Be advised that this is claiming to “set the trajectory” more than it is a promise to be the case right from the start. Still, the last time anyone used the word profit and Kodak was a sentence about short sellers betting against the stock. We will see if this profitability promise ever really comes to fruition.

As a reminder, those OTC shares of the pre-bankrupt Eastman Kodak will expire and only be worth whatever nostalgia buyers will pay for a stock certificate. in short the will be worthless. The company’s update on the matter previously confirmed this by stating:

On August 23, 2013, the Bankruptcy Court entered an order confirming the Plan of Reorganization, thereby approving the cancellation of all outstanding shares of stock. Existing stock will be cancelled as of the date that Kodak emerges from bankruptcy. Until then, it may continue to be traded as Kodak does not control the market.