Eastman Kodak Co., a former titan of the photography and imaging industry and a name well known to many Escondido residents, has asked for more time to file a reorganization plan in the corporation's Chapter 11 bankruptcy process.
The company, which struggled to adapt to the digital camera revolution, filed for bankruptcy earlier this year and has remained in business while attempting to streamline its operations and reorganize its business structure.
As part of the Chapter 11 bankruptcy process, Kodak was to submit a reorganization plan within 120 days of filing, but the company has asked the bankruptcy court to give them a six-month extension to file the plan.
Once a reorganization plan is submitted, Kodak will then have 60 days to engage their creditors to accept the plan.
While filing for an extension is not always the optimal course for businesses going through Chapter 11, it is a common occurrence. Kodak has cited its enormous and complex business structure as the reason for the delay in redesigning operations.
As discussed in previous posts, the business bankruptcy process is intended for companies that wish to remain in business while reconfiguring their operations to ensure a more efficient business model, and while also paying off their creditors over time. The intended goal is to emerge as a stronger business with a greater chance of becoming consistently profitable.
No company ever wants to file for bankruptcy and live through the associated negative press. Yet, filing for Chapter 11 has often been a solid long-term solution for companies in the San Diego that sought to remain in business by weathering a financial storm. Eastman Kodak Co. may prove to be just such a company that uses bankruptcy as an ultimately advantageous tool.
Source: USA Today, "Kodak says it needs more time to organize," Matthew Daneman, April 15, 2012.