Kodak and Citigroup Talking?
By: Caroline Tucker
Updated: January 13, 2012
Both Kodak and Citigroup are declining to comment on a Bloomberg report citing the two companies are in talks about arranging bankruptcy financing.
If true, it would mean Kodak is preparing to get cash it will need if it goes ahead with Chapter 11 bankruptcy.
Mark Peterson, CEO of Greater Rochester Enterprise, says 30 years ago Kodak and Rochester's other top companies, including Xerox and Bausch & Lomb, drove the city's economy.
He says those times are gone.
Peterson says if Citigroup and Kodak are talking, it's all about being prepared.
"They are putting all their ducks in a row," said Peterson. "Clearly if there is a Chapter 11 filing at Kodak, it's part of a corporate strategy to reorganize,"
Bankruptcy attorney Lou Morin has helped a handful of Rochester's large company's file for bankruptcy over the last 30 years.
The goals are the same in most cases.
"Getting rid of some of the things that drag the company down," said Lou Morin, partner at McConville, Considine, Cooman, & Morin.
Morin says a company needs to find cash before it files.
"I need to line up my ability to buy product after the filing of the bankruptcy, make payroll after the filing of the bankruptcy," said Morin.
Then in an op-ed piece in the Wall Street Journal, Forbes' magazine publisher Rich Karlgaard wrote a piece blaming Rochester for some of Kodak's troubles.
He blames Kodak for relying on film as its "cash cow," but also said Rochester's business environment doesn't encourage innovation and success.
He wrote: "Businesses located in places where success is the norm, and innovation is built into the ecology, have a better chance of fixing themselves."
He goes on to say Intel was able to dust itself off in the mid-1980's.
"Memory-chip factories were shuttered and people were laid off. That was, and is, easier to do in Silicon Valley, where the laid-off can more readily find new jobs, than in a small city like Rochester, whose population is now at 210,000 plus," Karlgaard wrote.
Peterson says there is a misconception about growth in Rochester. He says the economy has had its share of ups and downs but, "Our community is wealthy, growing, adding new jobs, adding new companies."
Other Rochestarians also disagree with the editorial.
"Rochester absolutely is not at fault for anything," said John Davies, who is disappointed by recent Kodak news. "We had the technical people, we had everything in place, it was the company and the way it was organized,"
"It's the company's fault for going downhill," said Tom Baker, a resident.
Peterson says he's confident Kodak's senior management will make smart decisions.
"In the end we may look back at this down the road and see this time as an important transitional time to a new emerging company that is more successful," he said.
If Kodak does file, many say it's likely the company will sell its valuable patents at auction, which would likely give Kodak the best deal.
