Report: Kodak Readies Bankruptcy Filing; Shares Plunge Below 50 Cents

Eastman Kodak (NYSE:EK) is reportedly preparing for a potential bankruptcy filing as early as this month if the once-iconic imaging company’s last-ditch effort to unload more than 1,000 patents fails.

According to The Wall Street Journal, the former blue-chip company is in discussions with potential lenders to obtain about $1 billion of debtor-in-possession, or DIP, financing should it succumb to Chapter 11.

The report, which comes just a day after the New York Stock Exchange threatened to delist the penny stock, sent 132-year-old Kodak’s shares plunging another 30% to new lows.

Rochester, NY-based Kodak, which has approximately 19,000 workers, is still attempting to sell its portfolio of 1,100 digital patents, which could be worth around $3 billion.

However, interested suitors Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG) are reportedly concerned about a potential bankruptcy filing.

If the sale plans fall through, Kodak may need to file for bankruptcy later this month or in early February, but it would continue to try to unload the patents through a court-supervised bankruptcy auction, the paper reported. Kodak would also continue to operate under such a scenario, the Journal said.

Once synonymous with the imaging world, Kodak has hit a cash crunch and is drowning in a river of red ink due largely to the adoption of digital imaging. In the quarter ended September 30, Kodak posted an operating loss of $174 million, its fourth consecutive loss. At the time, it listed $862 million of cash and equivalents on its balance sheet.

Its stock was worth $20 a share three years ago, but has since crumbled well below $1. Its market cap started the day at just $176 million, a far cry from its all-time high of almost $30 billion in 1997, according to Dow Jones Newswires.

After plummeting as low as 44 cents on the new report, Kodak was recently off 17.49% to 54 cents.