When Kodak filed it's initial emergence plan at the end of April, it did not get glowing endorsements from the US trustee or creditors. But seven weeks later, it has a group of creditors who will buy 85 percent of the emerged Kodak on a standby basis. That would raise about $406 million of equity capital. In turn, unsecured creditors who couldn't participate before, will get equity in the company and can buy shares of the new common stock. U.S. Bankruptcy Court Judge Allan Gropper said the company has a clear exit strategy, and approved those plans. Also approved, the nearly $1 billion in exit financing Kodak will use to operate the emerged company.
"Appears to be economically in the best interests of debtors," Kodak attorney Michael Torkin said.
The biggest hurdle was that disclosure statement, which the Judge Gropper approved despite "heartfelt" shareholder objections. He said their concerns can be raised at the plan's confirmation hearing. Meanwhile, all committees, including the unsecured creditors committee, support Kodak's plan. It has issued a letter to all those it represents but says "each creditor must, however, make its own independent decision as to whether the Plan is acceptable to that creditor before it votes to accept or reject the plan."
That confirmation will happen after creditors vote on the emergence plan. They have until August 9th to vote. Kodak hopes to emerge by September 3rd.
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