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Kodak Hires Lawyers, Weighs Bankruptcy Filing

David Duprey/Associated PressThe Kodak film bureau in Rochester, New York.

5:37 p.m. | Updated

Eastman Kodak, a uneasy camera maker, is deliberation a probable filing for bankruptcy, according to a chairman briefed on a matter.

The association has also hired law organisation Jones Day to support on a probable restructuring, Kodak confirmed.

Kodak, that has reported usually one full year of distinction given 2004, is weighing a options as it tries to seaside adult a financials and sell a collection of patents. In July, a association announced it was deliberation offered a organisation of 1,100 digital imaging patents, that it pronounced accounted for about 10 percent of a sum obvious portfolio.

Kodak pronounced on Friday that it had no evident skeleton for bankruptcy: “As we lay here today, Kodak has no goal of filing for bankruptcy,” Kodak orator Gerard K. Meuchner told DealBook. “There has been no change in a plan to monetize a intellectual.”

In a statement, a association said, “It is not surprising for a association in mutation to try all options and to rivet a accumulation of outward advisers, including financial and authorised advisers. Jones Day is one of a series of advisers that Kodak is operative with in that regard.”

The news comes usually a week after Kodak suddenly tapped a credit line, promulgation a batch reeling. On Friday, following a news that Kodak had hired a law organisation Jones Day, a company’s batch plunged again, this time by 53 percent, shutting during usually 78 cents.

“It’s one of those cascading effects,” pronounced Chris Whitmore, an researcher with Deutsche Bank Securities. “They are kind of cascading over a waterfall.”

Founded 131 years ago by George Eastman and formed in Rochester, N.Y., Kodak became famous for a yellow film packages that during one time dominated a market. But a association has struggled to reinvent itself for decades, as digital record has transposed film.

The stream arch executive, Antonio M. Perez, has attempted to energise a association by focusing on inkjet printers, blurb copy and a company’s immeasurable portfolio of patents, that a association has protected and are now attempting to sell.

But Mr. Perez’s plan has caused a association to bake by cash, and researcher Shannon Cross, of Cross Research, pronounced it was usually a matter of time before a money ran out.

“I’ve had a sell on a batch for roughly 10 years reckoning this day would come if they weren’t means to make poignant changes in their money burn,” she pronounced in an talk Friday. “We took a cost aim down to a dollar. We were expecting that a equity was probably worthless.”

Nonetheless, as recently as July, Mr. Perez likely that a association would be essential and tolerable digital association by 2012.

Still, final week’s warn proclamation that Kodak had tapped a credit line for $160 million shook investor’s certainty in Mr. Perez’s turnaround effort.

On Tuesday, Moody’s lowered Kodak’s ratings even serve into junk status, observant a hillside “reflects a company’s diseased financial opening and a hurdles Kodak faces in achieving postulated profitability and certain money upsurge over a middle term.” Moody’s pronounced a $160 million withdrawal was generally discouraging given it came right before a fourth quarter, typically a clever duration for Kodak’s money flow.

On Tuesday, Moody’s lowered Kodak’s ratings even serve into junk status, observant a hillside “reflects a company’s diseased financial opening and a hurdles Kodak faces in achieving postulated profitability and certain money upsurge over a middle term.” Moody’s pronounced a $160 million withdrawal was generally discouraging given it came right before a fourth quarter, typically a clever duration for Kodak’s money flow.

As of a finish of June, a association had $957 million in money on hand.

Earlier, The Wall Street Journal reported a employing of Jones Day. Bloomberg reported that Kodak was deliberation a bankruptcy.

Investment organisation Lazard, that is advising Kodak on a obvious sale, declined to comment. James L. Wamsley III, a counsel during Jones Day, also declined to comment.

Evelyn M. Rusli contributed reporting.

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