Eastman Kodak Company (OTC: EKDKQ) has announced the approval of a debtor-in-possession, or DIP, financing. The report shows that Judge Allan L. Gropper of the U.S. Bankruptcy Court (Southern District of New York) has now entered into a final order which approved Eastman Kodak’s DIP financing for $950 million between Kodak and its lenders and second-lien bondholders.
The report noted that non-U.S. subsidiaries were not part of the filing. The $950 million includes the initial $650 million approved as part of the First Day Motions, as well an additional $300 million in incremental availability.
The company is still somehow amazingly allowing Antonio Perez to run the show here as Chairman and CEO. What a joke. Perez went on to state in the release that the approved DIP financing is “another step towards ensuring that Kodak is positioned to execute on the goals the Company set out last month: Bolster our liquidity in the U.S. and abroad, monetize our non-strategic intellectual property, fairly resolve legacy liabilities, and enable Kodak to focus on its most valuable business lines.”
This DIP financing approval is less than a month after the Chapter 11 filing. Eastman Kodak is being advised by Lazard, AlixPartners LLP, and Sullivan & Cromwell LLP.
Whether or not this leaves a single penny for the common holders remains a question. Generally, most bankruptcies and upside scenarios like this tend to wipe the value of the common holders out entirely.
Kodak shares closed down almost 4% at $0.40 today.
JON C. OGG
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