Kodak is un-bankrupt.

BBC, ABC US, Forbes
Well, at least Kodak the name has approval to come out of Chapter 11 protection, and Kodak the name is just going to retire as a printing company.
Kodak the film and chemicals company (for those who didn't know) is now owned by its UK pension fund, I don't know if anyone knows how long htat's going to last until the kill off the last of Portra and TMax (I hope not, I love TMax).

We all knew this day was coming.
Sad, though, as most of the US based retirees appear to have been thrown under the bus.

From HuffPost: http://www.huffingtonpost.com/2013/08/20/kodak-bankruptcy-exit_n_3786675.html

On Tuesday, Judge Allan Gropper approved the company's plan to emerge from court oversight, paving the way for it to recreate itself as a new – and much smaller – company focused on commercial and packaging printing.

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In making his ruling, Gropper noted that his approval of the plan will result in the loss of retirement and health care benefits for many former workers, while many of the company's investors will recoup just pennies on the dollar.

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Marc

Dr Croubie said:

Kodak the film and chemicals company (for those who didn't know) is now owned by its UK pension fund, I don't know if anyone knows how long htat's going to last until the kill off the last of Portra and TMax (I hope not, I love TMax).

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Within the photographic field only the consumer business went to KPP.

The industrial photographic business, or rather what is left of it after several split-offs/or seeming cancelling, stayed with Kodak.
The future of that is still unclear.

Portra, TMax, and Ektar, are very popular products. Every time I buy it even in 8x10 it seems to represent a new emulsion batch, which tells
me it's being frequently run. RA4 paper is also doing well. So these film and paper products should be able to earn their keep for a long time,
especially since they no longer have to subsidize unrelated ventures within an oversize megacorp geared to market speculation rather than
basic sustained profit. If an asteroid hits us, or an ebola epidemic, ... who knows....but a game plan is in place, the product is being made,
and no need to panic. The dust is settling.

The Phoenix rises!

I hope PE didn't get bit too hard. Good luck Kodak(s).

DREW WILEY said:

So these film and paper products should be able to earn their keep for a long time,
especially since they no longer have to subsidize unrelated ventures within an oversize megacorp geared to market speculation rather than
basic sustained profit.

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My feelings exactly. Presumably Kodak sells a lot more film than Ilford, probably rather a lot more, and Ilford can make it work. Efke, Impossible Project, Foma, maybe Ferrania too. If Kodak can cut away the BS and run as a private entity without caring what The Street thinks, then this may be the best thing to have happened to film for a long time.

thegman said:

My feelings exactly. Presumably Kodak sells a lot more film than Ilford, probably rather a lot more, and Ilford can make it work. Efke, Impossible Project, Foma, maybe Ferrania too. If Kodak can cut away the BS and run as a private entity without caring what The Street thinks, then this may be the best thing to have happened to film for a long time.

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There will be shares in the new company no? If yes, then the Street will very much demand profits from the new Kodak.

The system of private capital markets that we have today is probably the greatest impediment to the creation of sustainably profitable companies that could possibly exist. Had one started out with a goal of designing the worst possible model, one could have done no worse than sketching Wall Street across one's lunch napkin.

Ken

Why did the UK pensioners have a claim against Kodak but none from elsewhere? It seems strange that only those in the UK got relief from Kodak in bankruptcy while the others were left out to dry.

The U.S. Trustee also filed an objection challenging the legality of hefty cash and stock bonuses that Kodak executives are expected to receive when the Rochester, N.Y., company exits from bankruptcy protection.

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Of course; Perez and his cronies wouldn't leave without raiding the corporate bank account. The stockholders get nothing, yet Perez exits an even wealthier individual. Must be his reward for his exemplary skills as a CEO.

RattyMouse said:

Why did the UK pensioners have a claim against Kodak but none from elsewhere? It seems strange that only those in the UK got relief from Kodak in bankruptcy while the others were left out to dry.

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I expect it is because the UK legislation imposes pension obligations on parent companies as well as directly on the employers. I also expect that the size of the UK pension claim was at least partially due to statutory restrictions on the investments that pension plans are able to make.

As I understand it, Kodak Limited (the UK employer) was similar to Kodak Canada - a wholly owned subsidiary of Eastman Kodak. That was how Eastman Kodak set up their worldwide businesses. As I understand it, all (or most) of the subsidiaries maintain(ed) their own pension plans.

As far as I know, none of the other international Kodaks are in bankruptcy. Certainly Kodak Canada isn't.

From what I have been able to gather, each of the international Kodaks, as well as Eastman Kodak, invested regularly the funds that their actuarial calculations indicated would be necessary to fund their pension obligations into the future. Most of those funds are held in a trust-like arrangement, and are immune from creditors.

The problems that have arisen are:

1) All the actuarial assumptions were based on normal market returns; and
2) To at least a certain extent, Eastman Kodak (and possibly others) were using current revenues to fund other, non-pension retiree benefits, like health plans.

As we all know, investment markets are far from what was once considered "normal".

I have seen at least one publication that indicated that the entire Kodak Limited pension shortfall is due to the reduction in interest payable on Government Treasury bills and similar, low risk investments.

In the case of the UK, there is a government fund intended to at least partially benefit those whose pension entitlements are not met due to employer shortfalls. That government entity was involved in the negotiations of the settlement, and is of the view that the assets being transferred to the UK pension plan are of considerably greater value than the value of the government's guarantee.

thegman said:

My feelings exactly. Presumably Kodak sells a lot more film than Ilford, probably rather a lot more, and Ilford can make it work. Efke, Impossible Project, Foma, maybe Ferrania too. If Kodak can cut away the BS and run as a private entity without caring what The Street thinks, then this may be the best thing to have happened to film for a long time.

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I'd be well happy with this. Leave Fuji as the only big cumbersome company with their fingers in every pie (although if they kill Velvia I'll scream), and turn Kodak more into the vein of Ilford. They may not be as diversified, but they do one thing and do it well, and are fairly healthy because of it. The smaller ones like Efke, Impossible, Foma, Ferrania, and Agfa/Adox/Maco/whoevertheyare are going to be the smaller, but more nimble and more able to listen to customers requests and react accordingly (I suppose Ilford belong in that boat too, eg their ULF-run).

It's still not a guarantee of sustainability unfortunately, case-in-point Efke. A tiny change in the market, customers and/or suppliers, or just a big bill for equipment repairs can sink the whole boat.

Maybe (and this is very very wishful thinking), a smaller nimble Kodak will result in them being able to do special runs of classic films or sizes (even 4x5/8x10 and/or ektachrome again), if they can find the chemicals and skills (as has been discussed-to-death in the 'ilford-colour' thread).

Corporate governance is going to be a weird one with this 'run by pension scheme' company. Do they have to just keep plodding along doing what they do? Are they allowed to invest in R&D, or does every spare penny go straight to the retirees? (ie, will we see anything more than Ektar/Portra/TriX/TMax/400CN ever again?) Are they getting the patents to the current films, or all films, or has EK sold the patents and they have to license? (and if so, does that mean that anyone else can also license?)

Also, if the US-based EK is keeping the motion-picture films and the UK-based Pension-fund is taking the consumer 135/120 films, are there any crossovers or are they very distinct production lines? And what's made where in what country?

Great news for sure, now I think the real work can begin in terms of market identification and marketing for film.

But....I hear a lot of talk of Kodak working to make film at a smaller and sustainable scale. The film is still going to be coated at Building 38 in Rochester, not at a new facility. As far as I know, it takes a huge amount of leader and tail to make the total of one mile of 54" wide un-slit film.....that goes for *each* emulsion type and then all over again for the thicker sheet film versions.

So Ron ( Photo Engineer ) correct me if I am wrong, but as long as KPP has to have the film coated in building 38, there is no smaller scale as is being enthusiastically implied here by several. I hope I am wrong, because a smaller scale would be far more ideal, like Ilford is able to do. But you and I were both in Rochester that rainy day in 2009 and I saw first hand what that complex operation looked like....as I recall, it was not built for short runs, maybe it can be re-tooled? I don't know, but that is the next question really, once Kodak has satisfied the 2015 motion picture film contracts, what happens next and how does that expected drop in the demand for film products overall play into the viability of the films we all love to buy and use if they still need to coat it a mile at a time?

Un-bankrupt is that something like undead I am happy for Kodak and I hope they can get rid of their Nosferatu who sucks the company dry meaning Count Perez and his Vampire friends. Garlic in the Filmcoating might help

Perez has already been reported as on his way out. That being said, fear any CEO of any type.

Then maybe Kodak's employees should stockpile garlic, stakes, crosses, etc.. for future use against corporate Nosferatu.

Ken Nadvornick said:

The system of private capital markets that we have today is probably the greatest impediment to the creation of sustainably profitable companies that could possibly exist. Had one started out with a goal of designing the worst possible model, one could have done no worse than sketching Wall Street across one's lunch napkin.

Ken

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I don't recall ever reading anything else about this online that I agree with as much as this. Spot on.

thegman said:

My feelings exactly. Presumably Kodak sells a lot more film than Ilford, probably rather a lot more, and Ilford can make it work. Efke, Impossible Project, Foma, maybe Ferrania too. If Kodak can cut away the BS and run as a private entity without caring what The Street thinks, then this may be the best thing to have happened to film for a long time.

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As another poster points out, Efke is not a good example as they are already gone. Of course they were making film with poor QC on equipment basically held together with duct tape and baling wire, but it (and even more so the paper) will be missed none the less.

Dr Croubie said:

It's still not a guarantee of sustainability unfortunately, case-in-point Efke. A tiny change in the market, customers and/or suppliers, or just a big bill for equipment repairs can sink the whole boat.

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Great news! Long live Tri-X!

Will the whole movie world really stop using film in 2015? I find that impossible to believe. There must be an endless number of movie studios world wide and now that Fuji is out of the business, only Kodak makes film for all these studios. Surely a large percentage will be using film after 2015.

RattyMouse said:

Will the whole movie world really stop using film in 2015? I find that impossible to believe. There must be an endless number of movie studios world wide and now that Fuji is out of the business, only Kodak makes film for all these studios. Surely a large percentage will be using film after 2015.

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If they're willing to pay for the costs, perhaps that's not an unreasonable prospect.

http://www.nytimes.com/2007/12/23/business/media/23steal.html?_r=1&oref=slogin

Although from an energy standpoint, digital in itself is becoming quite the drain, now consuming about 5% of the US energy. Data centers, transferring of data, storage, backup, etc etc etc - and it will only get worse.

Someone wondered where the UK pension-plans products would be made. When the deal went through (as widely discussed here I think) it was stated that the film materials would be made by Kodak at Rochester as before, and so the UK pension-plan has a supply-contract with the 'unbankrupt' Kodak. They cannot make anything themselves, in some spare garage with a dozen Kodak-pensioners round a table

MartinP said:

...the UK pension-plan...cannot make anything themselves...

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That is incorrect. When the deal is consummated, around September 1, the new film marketing/distribution company will not only purchase film from Kodak in Rochester to re-sell, it will also own the Harrow plant that still makes color paper. It could theoretically decide (if and when the still undisclosed terms of the agreement allow) to begin making film at Harrow as well. What those films would be like, and how closely they would resemble current Kodak films, if at all, is not knowable at this time.

Thomas Bertilsson said:

If they're willing to pay for the costs...

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Storage costs of $208,569 versus $486 for one motion picture for one year!? A million plus dollars for every five years? Good lord. I had no idea. That's insane.

Ken