One of Kodak's attorneys says he's
pleased with results following the company's second day of bankruptcy
The hearings were before Judge Allan Gropper in the U.S. Bankruptcy Court in the Southern District.
The hearing began at 11am, in a packed courtroom.
More than 80 people, including attorneys, advisers, creditors, and journalists packed the room.
The biggest developments of the day: the Kodak Theatre will lose its name and Kodak was approved to receive the $950 million in debtor-in-possession financing from Citigroup.
During court proceedings, Kodak said it was not in the best business interest of the company to continue to pay the naming rights fees.
In 2000, it signed a 20 year contract for $75 million. Kodak's attorneys said at this point the company still owns $38 million dollars on that contract. They said Kodak pays roughly $3.6 million every year to have its name on the theatre.
An attorney representing the creditors committee said creditors supported the business judgment for Kodak to get out of that naming rights contract.
The CIM Group owns the Kodak Theatre. The company's attorney, Thomas Leanse, fought hard in court to convince the judge that Kodak had already gotten its monies worth for contract.
He said the CIM Group did the tasks it was obligated under the contract: put up the Kodak name and obtain an agreement with the Academy of Motion Picture Arts and Sciences to hold the Oscars at the theatre.
He said that even if the Kodak name is taken off of the theatre, that the association would always be there.
The second argument was that if the judge were to agree to pulling the name from the theatre, to at least give the CIM Group time until after the Oscars to reject Kodak's contract.
Judge Gropper said he is sure Kodak would love to have its name on the theatre but that it has an interest to the creditor body to be able to pay its other bills.
Despite, the CIM Group's argument, Gropper said it would approve Kodak's request to reject the naming rights contract.
A new naming rights sponsor will have to be found. Leanse said he didn't think that could happen before Oscar night.
The judge failed to give a specific date for when the Kodak sign would have to come down, that will likely be up to the CIM Group. Leanse said he will have to talk with the owners.
"Mr. Crystal will have a field days at the Oscars," said Thomas Leanse, CIM Group attorney.
Also, on the agenda, was that $950 million in financing from Citigroup that Kodak needed to pay its bills.
The judge agreed to the financing, after Kodak submitted a revised DIP plan.
It includes protection for secured parties that Kodak owes money too.
Koday's attorneys said that they worked for the last month to get the new wording correct, which all parties would agree to.
It allows for Citigroup to receive its loan money back after Kodak sells off its valuable intellectual property.
This money will allow Kodak to pay its day-to-day bills like payroll and utility bills.
An attorney for Kodak told me he was happy about the day's results.
"It paves a way forward for a constructive restructuring process between all the parties," said Michael Torkin, attorney for Kodak.
In total, there were 22 motions before the court, most of them were uncontested.
The judge agreed to order most of those, only a couple issues concerning property were scheduled for another date.
There is another court date set for February 28, 2012.