Judge Severs Kodak, Sony Pictures Film Contract
By: Caroline Tucker
Updated: February 20, 2013
Kodak is ending its contract with Sony Pictures to provide the company film at discounted rates.
In August, Kodak reached new deals with four other movie studios for motion picture film.
U.S. Bankruptcy Judge Allan Gropper approved the split Wednesday afternoon.
Over the last year, Kodak and Sony Pictures negotiated on a new deal. No new deal was ever reached.
The current contract charged Sony at 2006 prices, but Kodak said it could no longer honor that.
Sony's attorneys claimed that Kodak unfairly negotiated even though it has similar terms with other movie studios. They said Kodak holds a monopoly in the market due to Fujifilm's exit.
Fujifilm announced in September that it would end production of motion picture film by the spring, citing a lack of profitability due to the cinema industry going digital.
Kodak has remained the leader in film stock in Hollywood.
Judge Gropper said Sony did not cite a provision of the law that would force Kodak to continue it's contract at 2006 prices. He went on to say that Kodak did not negotiate in bad faith.
Over the last year, Sony Pictures bought 450 million feet of film from Kodak, according to Sony's attorney.
Sony said it spent $36 million on film and is still owed $9.5 million in rebates from Kodak.
Judge Gropper said Kodak has the right to exit the contract. He said Kodak would have lost about $18 million if it had continued with it.
Sony Pictures will be back in court on March 20 to ask for the rebate money it said it is still owed.
Sony can still buy Kodak film, but it will now be at the current rates.
In August, Kodak reached new deals with four other movie studios for motion picture film.
U.S. Bankruptcy Judge Allan Gropper approved the split Wednesday afternoon.
Over the last year, Kodak and Sony Pictures negotiated on a new deal. No new deal was ever reached.
The current contract charged Sony at 2006 prices, but Kodak said it could no longer honor that.
Sony's attorneys claimed that Kodak unfairly negotiated even though it has similar terms with other movie studios. They said Kodak holds a monopoly in the market due to Fujifilm's exit.
Fujifilm announced in September that it would end production of motion picture film by the spring, citing a lack of profitability due to the cinema industry going digital.
Kodak has remained the leader in film stock in Hollywood.
Judge Gropper said Sony did not cite a provision of the law that would force Kodak to continue it's contract at 2006 prices. He went on to say that Kodak did not negotiate in bad faith.
Over the last year, Sony Pictures bought 450 million feet of film from Kodak, according to Sony's attorney.
Sony said it spent $36 million on film and is still owed $9.5 million in rebates from Kodak.
Judge Gropper said Kodak has the right to exit the contract. He said Kodak would have lost about $18 million if it had continued with it.
Sony Pictures will be back in court on March 20 to ask for the rebate money it said it is still owed.
Sony can still buy Kodak film, but it will now be at the current rates.
