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The photography and digital imaging giant Eastman Kodak has again requested that a United States Bankruptcy Judge extend the amount of time it has to emerge from bankruptcy. Kodak is asking that the court extend its deadline to file a bankruptcy exit proposal until May 31st of this year without threat from competing plans and impose a July 31st deadline to gather support for the proposal.
Kodak filed the request with the Manhattan U.S. Bankruptcy Court, and it is the company’s 3rd request of this kind in a little over a year. In November, Kodak filed a similar request which was met with opposition by bondholders who argued that the company be forced to relinquish control, citing a lack of progress and monthly expenses of $50 million a month.
The request comes in after the approval of a deal in which Kodak sold the rights to digital-imaging patents for $527 million, much less than the company expected from the sale. The sale had the effect of both generating cash for the company, as well settling patent litigation that could have potentially stalled the company emerging from Chapter 11.
Kodak initially filed for Chapter 11 bankruptcy protection in January 2012, after having lagged behind competitors after being slow to adopt digital technology, despite have been the company to first invest a digital camera.
Chapter 11 bankruptcy is a form of reorganization bankruptcy that is used primarily by business, but is available to individuals as well. Chapter 11 is different than a Chapter 7 bankruptcy, in which a company’s or individual’s non-exempt property is liquidated in an attempt to pay off creditors. Chapter 11 bankruptcy allows a company to stay in control of operations as a debtor-in-possession. Like other forms of bankruptcy, Chapter 11 includes the automatic stay, which prevents collection attempts or filing or continuing any litigation to collect a debt. Chapter 11 bankruptcy also allows for a debtor to secure financing on favorable terms by allowing creditors priority status on any future business earnings.
If you or your business is facing financial difficulty, bankruptcy may be able to help. In order to determine whether bankruptcy is right for you, you should have your circumstances reviewed by an experienced St. Louis bankruptcy attorney. The attorneys of The Westbrook Law Group are dedicated to helping consumers and businesses gain financial freedom through bankruptcy. To schedule a free initial consultation with a St. Louis bankruptcy lawyer, contact us today at (636) 493-9231 or fill out the contact form on the right side of the screen and a member of our staff will be in contact with you soon.