Eastman Kodak Co can abandon a sponsorship deal for the Hollywood theater that hosts the Academy Awards, a U.S. judge ruled, while declining to decide whether the bankrupt company's name should be taken down before the Feb. 26 Oscars ceremony.
Kodak has the right under bankruptcy law to reject the remainder of its 20-year naming rights commitment for the Kodak Theater, Bankruptcy Judge Allan Gropper said on Wednesday. Kodak signed the $74 million deal in 2000.
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The once-dominant photography company filed for bankruptcy last month in hopes of restructuring pension obligations and selling its intellectual property.
The company sought to have its name removed from the 3,400-seat theater immediately, but the building's owner, CIM Group, objected. CIM said it would be unfair for Kodak to remove its sign before the Oscars, an enormous marketing opportunity in which Kodak would continue to get brand recognition even if its name were no longer etched onto the building.
Judge Gropper, of federal court in Manhattan, disagreed, albeit light-heartedly, saying Kodak's financial troubles could become the butt of jokes by Oscars host Billy Crystal.
"If you believe it would be better to leave the sign up, I suppose the result will be (Oscars host) Billy Crystal will make some joke about this being the Kodak Theater and Kodak being in Chapter 11," Gropper said.
"I think that damages Kodak more than it affects your client," he told CIM's lawyers.
Still, Gropper said, the decision on when the name should be removed sh ould be up to the parties, though he left the door open for the two sides to seek damages in court if they cannot resolve their dispute.
The case is in re: Eastman Kodak Co et al, U.S. Bankruptcy Court, Southern District of New York. No. 12-10202.