The reorganization plan would wipe out current Kodak stockholders as the company would start fresh with all new shares. The numerous shareholders who have written the court and Gropper were the focus of part of the two-hour-plus court hearing, though ultimately not in any way that?s likely to be of any comfort.
Some shareholders have argued that Kodak is more valuable than the company has stated publicly, so creditors should be paid in full and shareholders should not be wiped out. Gropper said those claims will be addressed at a hearing scheduled for Aug. 20, when the court will rule on the emergence plan itself. That hearing, he said, will include testimony on the value of the company, as well as how various stakeholders might make out if the company were liquidated vs. Kodak?s reorganization plan.
Michael Torkin, an attorney with the New York law firm Sullivan & Cromwell, representing Kodak, told the court that while shareholders? frustration is palpable, that hidden value they claim doesn?t exist.
An attorney for the committee representing unsecured creditors ? as well as shareholders? interests, though they actually cannot make claims they are owed money by the company ? said the financing plan and the emergence plan were the result of ?bitter negotiations? with the company and with the lenders ponying up $895 million to get the company out of bankruptcy and with some operating cash afterward.
The current emergence plan is sizably different from what Kodak first proposed on April 30, providing unsecured creditors a chance to buy stock in the new Kodak at a set price of $11.94 a share, thus giving them a chance to recoup some losses if the company turns out to be successful.
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