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The $527 million purchase of Eastman Kodak Co.’s digital imaging patent portfolio was approved Friday by a U.S. Bankruptcy judge. The approval is key step in Kodak’s effort to emerge from bankruptcy during the first half of 2013.
“With the court’s approval of the sale of our digital imaging patent portfolio, we have achieved one of Kodak’s key restructuring objectives, while positioning our Commercial Imaging business for further growth and success, and enabling Kodak to repay a substantial amount of its initial lending,” Kodak officials said in a statement.
“We also welcome the court’s approval of the sale of Eastman Business Park’s utilities to Recycled Energy Development, which marks a major step in the park’s revitalization and provides stability for the park and its tenant companies.”
Kodak filed for Chapter 11 bankruptcy on Jan. 19, 2011.
In late November the company said it had accepted an $830 million financing offer from a group of bondholders. The financing was contingent on the sale of the patent portfolio for no less than $500 million.
A consortium organized by Intellectual Ventures Management LLC and RPX Corp. bought the patents. The deal, announced Dec. 19, includes a series of agreements, and involves sales and licenses. The consortium includes industry giants Amazon.com Inc., Apple Inc., Facebook Inc., Google Inc. and Samsung Electronics Co.
Kodak originally had hoped to receive more than $2 billion for the patents.
U.S. Bankruptcy Judge Allan Gropper in Manhattan acknowledged at the hearing Kodak was “disappointed” in the price, Bloomberg reported. “But we’re moving the case forward, so we should be optimistic,” he said.
Michael Torkin, an attorney for Kodak, said the sale agreement is the best deal the company could get and that it achieves “patent peace” by settling litigation, Bloomberg reported.
Kodak on Dec. 21 announced a deal with Illinois-based Recycled Energy Development to buy, upgrade and operate the utility infrastructure of Eastman Business Park. It aims to convert the industrial park’s coal-fired power plant to natural gas, the company’s CEO said. It expects to invest $40 million to $80 million to convert plant.
Financial terms of the agreement include some $10 million total in cash paid to Kodak for utility assets, officials said.
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