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Ricoh Opposes Kodak Technology Sale
Intel Corp., Ricoh Co., Nikon Corp. , Motorola Solutions Inc. and Apple Inc.are among the high- technology companies opposing Eastman Kodak Co.’s plan to sell digital-imaging technology at an auction tentatively scheduled for August.
Kodak filed court papers this month to set up procedures for what it calls a “flexible, competitive sale process” culminating in an auction. The technology companies filed papers on June 25 objecting to key aspects of the proposed sale. The bankruptcy court in Delaware will hold a hearing on July 2 to decide if sale procedures pass muster.
The companies object to selling the technology if the bankruptcy court simultaneously extinguishes licenses they signed with Kodak for the use of patents. Generally, they take issue with the proposition that the sale can eradicate their rights and defenses with regard to the technology.
Motorola, like Intel, argues that the bankruptcy court shouldn’t allow the technology to be sold with the proceeds placed in escrow, for later allocation among those claiming an interest. Motorola said it “cannot be compelled to accept money satisfaction” in place of rights under patent licenses.
Intel and others said that selling free and clear, with proceeds placed in escrow, “is simply not feasible.” The companies contend that the bankruptcy judge can’t summarily rule on their interests in technology through approval of a sale.
Instead, they say the extent and nature of their interests can only be decided through a lawsuit, like the one Kodak filed last week in bankruptcy court against Apple. In turn, Apple is attempting to remove the suit from bankruptcy court, saying only a federal district judge has the right to rule on patent disputes.
Kodak’s $400 million in 7 percent convertible notes due 2017 traded yesterday for 15.5 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.
Kodak, based in Rochester, New York, filed for Chapter 11 reorganization in January, listing $5.1 billion in assets and $6.75 billion in debt. Liabilities for borrowed money, totaling $1.6 billion, included $100 million on a first-lien revolving credit and $96 million in outstanding letters of credit.
Other liabilities include $750 million in second-lien notes, $406.1 million in convertible notes, and $252.4 million in senior unsecured notes. Trade debt was $425 million.
Kodak’s case is In re Eastman Kodak Co. , 12-10202, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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