Chances are most readers in the Cleveland area have used a product made by Kodak. For many, the name is almost synonymous with photography. However, with the widespread use of digital cameras, Kodak and its business of making film has struggled to remain profitable.
The company filed for bankruptcy in January 2012 and hopes to emerge from the process as a stronger company. Any business can face similar difficulties. It's important for those business owners currently facing the prospect of commercial bankruptcy to understand bankruptcy laws and how they will affect their business.
Kodak expects to survive its bankruptcy due in large part to an $830 million line of credit the company secured from various lenders. In addition, the company shed roughly one out of every five of its employees, including both management and hourly workers.
However, the biggest change is undoubtedly the fact that the company will no longer be in the photography business. Its digital camera business has been shut down. In addition, its still-camera film business and related businesses are now for sale.
Kodak will now be a printing company. It will focus on commercial and packaging printing and continue to develop technologies like functional printing (printing as a means of building circuit boards, solar cells and other tangible goods). While the future is not certain for Kodak, the fact that it was able to secure such a large line of credit means that lenders retain some confidence in the company's prospects.
When technological or other market forces change, it can bring down businesses that may have once been extremely profitable. This can happen to large businesses as well as small ones. Business owners having a difficult time with the poor economy may be considering filing for business bankruptcy. Those owners must understand how the law will affect their specific situation to make the best decisions for themselves and their business.
Source: The Tennessean, "Kodak has hopes of better days to come after bankruptcy," Matthew Daneman, Dec. 25, 2012