Employee Files Lawsuit Against Kodak
By: Deanna King
Updated: January 30, 2012
A Kodak employee has filed a lawsuit against Kodak. CEO Antonio Perez
and several board members are cited in the lawsuit. The suit file by
Mark Gedek claims workers should have never been offered stock when they
knew it would lose value.
"It looks to me like something that will have very little chance for success," said financial analyst George Conboy, Brighton Securities. The suit alleges that because executives and board members own a lot of stock they had incentive to keep stock in the retirement plans. "Virtually all big public companies make available to buy their stock in their 401k plan, but virtually never does any corporation give any employee advice on should they buy it or not."
Kodak filed for bankruptcy January 19th. The suit says Kodak cost retirees a lot of money because retirement plans rely on stock. Conboy says Perez's own words could hurt the company. "The CEO of Kodak actually said as recent as July of 2007 that the company would be profitable and sustainable by 2012," said Conboy. "That could be a problem."
The law firm Faruqi & Faruqi, LLP, is representing Gedek. Lawyers hope to make it a class action lawsuit and represent other employees who bought stock after January 2010.
"It looks to me like something that will have very little chance for success," said financial analyst George Conboy, Brighton Securities. The suit alleges that because executives and board members own a lot of stock they had incentive to keep stock in the retirement plans. "Virtually all big public companies make available to buy their stock in their 401k plan, but virtually never does any corporation give any employee advice on should they buy it or not."
Kodak filed for bankruptcy January 19th. The suit says Kodak cost retirees a lot of money because retirement plans rely on stock. Conboy says Perez's own words could hurt the company. "The CEO of Kodak actually said as recent as July of 2007 that the company would be profitable and sustainable by 2012," said Conboy. "That could be a problem."
The law firm Faruqi & Faruqi, LLP, is representing Gedek. Lawyers hope to make it a class action lawsuit and represent other employees who bought stock after January 2010.
Comments
Many managers (CEO, CFO, and CIO) suggested that EK stock would grow to $125/share and that (in the case of the CFO) all his money was going there. Soon, management was back pedaling as fast as they could. There were no guarantees on the future value of Kodak stock or any stock for that matter.
bill b.
January 30, 2012 at 6:52 pm
