Kodak Executives Seek Millions In Claims
By: Mark Gruba
Updated: August 23, 2012
With Kodak's future in doubt, the company's top executives, including CEO Antonio Perez, are filing claims to receive money from the bankruptcy court.
It's money that was promised to these executives by Kodak when times were good. "These executives have a legel right to make these claims and the court will probably give them the same kind of settlement for their claims that a general creditor will get," said financial analyst George Conboy of Brighton Securities on Tuesday.
Conboy said the claims are for special executive pay and benefits, compensation cut off because of bankruptcy. Tax qualified pensions are covered by federal regulations, but these special packages - some in the millions of dollars - are not guaranteed. "No, certainly the executives will not get anywhere near the face value of their claims," said Conboy. "There's no way to know right now whether they'll get five cents on the dollar, 10 cents on the dollar, 25 cents on the dollar, but because of the size of the CEO's claim, Mr. Perez could easily get a million dollars or more."
EKRA President Art Roberts said not every claimant is a senior executive and that roughly 1,200 to 1,300 retirees are also impacted. "I do feel strongly that the retirees that do have pension claims have a legitimate right to have those claims paid," he said.
When the bankruptcy court rules, secured creditors will be paid first, followed by unsecured creditors. The executives will fall in line near the bottom of the heap with the general creditors, just above the shareholders. How the court will ultimately view their claims is unclear. "Whether Kodak's other creditors, whether the court will think that the senior management team that put the company in bankruptcy deserves a settlement, that's another question," said Conboy.
The deadline to file a claim is July 17. Conboy said we'll likely know how much money the executives will receive in the next six months.
It's money that was promised to these executives by Kodak when times were good. "These executives have a legel right to make these claims and the court will probably give them the same kind of settlement for their claims that a general creditor will get," said financial analyst George Conboy of Brighton Securities on Tuesday.
Conboy said the claims are for special executive pay and benefits, compensation cut off because of bankruptcy. Tax qualified pensions are covered by federal regulations, but these special packages - some in the millions of dollars - are not guaranteed. "No, certainly the executives will not get anywhere near the face value of their claims," said Conboy. "There's no way to know right now whether they'll get five cents on the dollar, 10 cents on the dollar, 25 cents on the dollar, but because of the size of the CEO's claim, Mr. Perez could easily get a million dollars or more."
EKRA President Art Roberts said not every claimant is a senior executive and that roughly 1,200 to 1,300 retirees are also impacted. "I do feel strongly that the retirees that do have pension claims have a legitimate right to have those claims paid," he said.
When the bankruptcy court rules, secured creditors will be paid first, followed by unsecured creditors. The executives will fall in line near the bottom of the heap with the general creditors, just above the shareholders. How the court will ultimately view their claims is unclear. "Whether Kodak's other creditors, whether the court will think that the senior management team that put the company in bankruptcy deserves a settlement, that's another question," said Conboy.
The deadline to file a claim is July 17. Conboy said we'll likely know how much money the executives will receive in the next six months.
