Kodak to consider filing for bankruptcy

[theguywitha645d]

Fair enough. Although saying there's no problem at all is ignoring the abysmal financials of the company.

But I never claimed there was no problem. Why do we always point to extremes?

[feppe]

But I never claimed there was no problem. Why do we always point to extremes?

Your "there actually may not be a problem..." can't be an accurate assessment of Kodak's financial status on any level.

[theguywitha645d]

Your "there actually may not be a problem..." can't be an accurate assessment of Kodak's financial status on any level.

The point was in juxtaposition to what was being posted. I was really referring to Kodak declaring bankruptcy--that has not actually happened.

[Slobodan Blagojevic]

Why would the executives need arresting since it's the board of directors who determine their pay?

Besides, it's up to the board of directors and shareholders to ensure that the executive team is competent, and that their actions are good for the company, not for the courts - except for clearly criminal instances, like the Madoff case.

I am not advocating arrests, but the board-senior management relationship is often far from its arm's-length appearance. It is more complicated than that and often incestuous: it is the same circle of senior managers who serve on each other's boards, simultaneously or not, scratching each other's backs, tacitly or explicitly. Once you are in that "circle of trust", your loyalty is to the circle (and your own self-interest) not to shareholders. I'll approve your outrageous salary/bonus today, you'll do the same for me tomorrow.

When the times are good (read: the tide lifts all boats), the board will reward me with an outrageous bonus, as if it is to my credit only. When the times are bad, I'll cry to the board "it's not my fault, it's the market, please reprice my options", and they will. When I do something right, I'll claim the credit (privatize profits). When I screw up, I will ask for a bailout (socialize losses). And when I really and royally screw up, the board might fire me, but once again with an outrageous golden parachute package. I can not lose. Losing is for losers (read: shareholders, stakeholders, employees).

[revaaron]

You know, incompetence is not a crime, and it is really up to the shareholders to assert that the company has a competent management.

If I crash my car and kill a person, I can go to jail.  Since companies are people, I would think that the execs could be brought up for killing this person in this slow motion firey crash.

[Slobodan Blagojevic]

... Since companies are people...

"Not until Texas executes one"

[jeremypayne]

Since companies are people

[Slobodan Blagojevic]

"Companies are people" is a reference to the recent Supreme Court decision to treat companies as having freedom of speech (as people do) for campaign contribution purposes.

[bcooter]

Without knowing the specifics of Kodak's balance sheet, as a professional image maker, I see no joy in Kodak's fall from grace.

Even in decline, Kodak is a very large company and in my dealings with them from film to the transition to digital, depending on which group I was talking to I found them kind, innovative and forward thinking, or conversely, arrogant, obtuse and protective.

Contrast Blockbuster, HP, Polaroid, GM, Chrysler,  (this list can go on for a long time) to Apple,  Netflix, Canon, Toyota and IBM and you will see the ability to survive in today's ultra competitive market is directly proportional to a company or person's ability to adapt and market
that change.

End result, if you've been in photography for 15 years, then the decline of Kodak means something to you.  If you're starting out, your probably won't notice it.

IMO

[Wayne Fox]

"Companies are people" is a reference to the recent Supreme Court decision to treat companies as having freedom of speech (as people do) for campaign contribution purposes.

Perhaps referencing the more recent statement by Mitt Romney about corporations being people too?  There's also a pretty popular book entitled "companies are people, too".  There is some truth to the statement.

Kodak was a very large company that got caught in a radically changing technological shift.  Their cash cow (film) dried up far more quickly than they anticipated, and despite numerous attempts at reorganization, they've targeted the wrong strategy on several occasions as they've struggled to stay afloat.

Related to the thread itself, Kodak has denied plans for filing a bankruptcy. From what I've picked up it seems they hired a law firm to advise them in reorganization,  Of course any firm working on corporate turn arounds would certainly be involved in a large number of bankruptcies so they are labeled as "bankruptcy experts", but it's part of the strategy quite often.  GM and Chrysler recent high profile examples. 

[Schewe]

Related to the thread itself, Kodak has denied plans for filing a bankruptcy. From what I've picked up it seems they hired a law firm to advise them in reorganization,

I agree...I think the Bloomberg article is disingenuous...

I think it's highly likely that the law firms have been retained to make sure any sale of IP is locked down and "light tight" so that Kodak can maximize the value of that IP...

Any time a corporation starts selling IP, there is a real question of the true value of the IP and how secure a sale will be. We've seen a lot of patent sales lately...Apple and MSFT teamed up to buy a lot of Nortel IP and later Google put in a bid to buy a lot of Motorola IP...there's a lot at stake since the major players seem to like suing each other as an opening bid on eventual licensing agreements.

Look, Kodak has been a prolific patent applier...they own tons of IP relating to digital imaging and storage and transmission of digital images. What is in question now is the relative value?

While Polaroid was forced into bankruptcy because they simply couldn't finance their debt and had little revenue, Kodak could almost survive on IP licensing alone–if the value was placed high enough.

Yes, I agree that Kodak's fall from grace was and still is staggering...Kodak COULD have owned the industry. But their "experts" mis-predicted the industry trends because all this stuff happened a lot faster than most predicted. Hindsight is 20/20...

I hope Kodak well...but they are not all that different from many old school rust-belt corps that had the rug pulled out from under of them because they couldn't, as a corp entity, react quick enough to adapt and adopt.

Apple literally was on the verge of blowing up before Steve came back and pulled themselves from the brink. Talk about revenge of the nerds...look at Apple and then MSFT. Who would you rather have had stock in the last 10 years? And no...I couldn't pull the trigger on buying Apple cause I really thought they were going away. Course the upside is I didn't buy MSFT either :~)

[Wayne Fox]

Apple literally was on the verge of blowing up before Steve came back and pulled themselves from the brink. Talk about revenge of the nerds...look at Apple and then MSFT. Who would you rather have had stock in the last 10 years? And no...I couldn't pull the trigger on buying Apple cause I really thought they were going away. Course the upside is I didn't buy MSFT either :~)

I did buy a 1000 shares at around $12 (which would now be 2000 shares) but then wasn't willing to ride out the bet when it shot to $28 6 weeks later. (still kicking myself frequently)

[Graham Mitchell]

Share price chart for Friday:

[theguywitha645d]

But remember how good financial experts are:

Home prices are guaranteed to increase 10% annually--invest in Mortgage Backed Securities
Lehman Brothers is solvent
Dot Coms are a great investment
Reducing taxes and regulation produces a healthy and robust economy
Rating agencies are alway right
You can't beat the market unless you invest with Bernie Madoff.

[tnabbott]

I am not advocating arrests, but the board-senior management relationship is often far from its arm's-length appearance. It is more complicated than that and often incestuous: it is the same circle of senior managers who serve on each other's boards, simultaneously or not, scratching each other's backs, tacitly or explicitly. Once you are in that "circle of trust", your loyalty is to the circle (and your own self-interest) not to shareholders. I'll approve your outrageous salary/bonus today, you'll do the same for me tomorrow.

When the times are good (read: the tide lifts all boats), the board will reward me with an outrageous bonus, as if it is to my credit only. When the times are bad, I'll cry to the board "it's not my fault, it's the market, please reprice my options", and they will. When I do something right, I'll claim the credit (privatize profits). When I screw up, I will ask for a bailout (socialize losses). And when I really and royally screw up, the board might fire me, but once again with an outrageous golden parachute package. I can not lose. Losing is for losers (read: shareholders, stakeholders, employees).

+1