Eastman Kodak Delays Patent Auction As Bidders Offer Low Price

Eastman Kodak Delays Patent Auction As Bidders Offer Low Price
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Eastman Kodak Company (PINK:EKDKQ) decided to delay auction process for its 1,100 digital imaging patents indefinitely, after the company failed to reach an acceptance sale agreement with prospective buyers, according to its filing with the U.S. Bankruptcy Court in New York.

Eastman Kodak Delays Patent Auction As Bidders Offer Low Price

Based on Kodak’s court filing, the company plans to explore other options, such as establishing a new licensing company that would manage the patents, and try to raise money to be able to pay its creditors and recover from its Chapter 11 bankruptcy.

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Eastman Kodak Company (PINK:EKDKQ) filed for bankruptcy protection in January, and hoped to sell its digital imaging patents, worth more than $2.6 billion, to pay its debts and to reorganize as a commercial packaging and printing company.

A report from Wall Street Journal cited that Eastman Kodak Company (PINK:EKDKQ) tried to negotiate an acceptable amount from a group of bidders interested in purchasing its patents since August, but it failed to reach a deal. According to the report, the offer from prospective buyers ranged from $150 million to $250 million, far lower than the estimated value of the patents.

Some of the potential buyers include technology giants Apple Inc. (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOG), and patent aggregators, such as Intellectual Ventures Management LLC and RPX Corp. (Nasdaq:RPXC).

U.S. Bankruptcy Court Judge Allan Gropper scheduled a final hearing for the sale of the patents on September 19, after three adjournments. The company decided not to push for a series of extensions for the date of the sale hearing. Eastman Kodak Company (PINK:EKDKQ) said it will continue its discussion with interested buyers, and will inform the court if it will be able to seal an agreement.  Krista Gleason, spokesperson for Kodak, said, “Kodak continues active negotiations with regard to the potential sale of its digital imaging portfolio”

In its court filing, the company also warned that it “may not reach acceptable terms with parties via auction process.”

In July 2011, Kodak started selling its digital patents before filing for Chapter 11 bankruptcy protection in January. According to WSJ, the patent sale was problematic from the beginning, because buyers were concerned that repeated litigation and licensing diluted the value of the patents.

Kodak previously announced its plan to sell some of its business segments, such as its camera-film business. The company also plans to cut 1,000 jobs.

The company expects to recover from bankruptcy early next year, and most recently, Kodak implemented new cost reduction programs and organizational changes to focus on its Commercial, Packaging & Functional Printing Solutions, and Enterprise Services business.

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