Shares of Eastman Kodak Co. crashed amid fears that the photography pioneer is headed toward bankruptcy. Shares in the 131-year-old company have tumbled following Kodak’s disclosure last week that it pulled $160 million from a credit line. On Friday, Kodak’s bonds plunged and its shares fell 54%, or 91 cents, to 78 cents, after The Wall Street Journal reported the company had hired restructuring advisers. Kodak had hired Jones Day and said it was “committed to meeting all of its obligations and has no intention of filing for bankruptcy.” Kodak said it was exploring all its options and one of several advisers it was consulting after losing nearly $1.8 billion since 2007.
The photography pioneer has struggled with the move to digital cameras and failed to turn a profit since 2007. It has been exploring a sale of its digital imaging patents, worth an estimated $2 billion. Kodak, whose operations burned $847 million in the first half of the year, had $957 million in cash on June 30. According to this situation, Bloomberg notes that Kodak may need to file a chapter 11 bankruptcy in order to ensure that bidders for its intellectual property are not legally responsible for a fraudulent conveyance claim.
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