Eastman Kodak Co. has put in a request to the U.S. Bankruptcy Court in New York for $13.5 million to be doled out to over 300 senior employees as an incentive to prevent these particular employees, mostly executives and important managers, from leaving the company to take up more attractive jobs that could potentially be offered by other companies. Kodak’s submitted outline entails that the targeted employees are “very important” due to their comprehensive knowledge and skills which could play an important role in helping the company emerge from Chapter 11 bankruptcy.
Kodak filed for bankruptcy protection in its 132nd year of business earlier this January with many analysts citing the failure of the company to transition from film to digital effectively and failing to keep up with the market as primary causes.
For years now, Kodak’s actions and reports have been hinting at bankruptcy or financial troubles. Among the actions were the closing of more than 10 manufacturing sites, the hiring of Jones Day for restructuring help and so on.
Kodak also shot itself in the foot by releasing financial results of its past 3rd quarter which showed a dreadful plunge in revenue.
Kodak, after declaring its bankruptcy, had to make a deal with Citigroup on a $950 million lifesaver and also announced that it will stop manufacturing digital cameras, digital picture frames and pocket video cameras as well.
Meanwhile, Kodak’s bankruptcy has been quietly affecting its 16,000 employees, many of whom are eligible for Medicare.
Kodak attracted outrage this past week after it proposed to end health care benefits for its retirees which promptly forced the company to withdraw its proposal.
For now, as Kodak starts on completing restructuring and reorganizing itself before the set deadline of February 15, 2013, the company will be setting up a retiree committee to overlook most matters regarding the aging workers.
(Cover Photo: REUTERS/Stefan Wermuth)