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  • August 2015 (Revised October 2023)
  • Case
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Eastman Kodak Company: Restructuring a Melting Ice Cube

By: Stuart C. Gilson, John D. Dionne and Sarah L. Abbott
  • Format:Print
  • | Language:English
  • | Pages:34
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Abstract

In May 2013, senior managers of GSO Capital Partners, an $80 billion credit-oriented investment firm owned by The Blackstone Group, are considering what to do next with their investment in the senior secured debt of Eastman Kodak Company. Once a great company and an icon of American business, Kodak had fallen on desperately hard economic times as its traditional business of manufacturing cameras and photographic film had all but disappeared with the rise of digital photography, causing its annual revenues to plummet from $13 billion to $6 billion, and its stock price to fall by 95%, between 2003 and 2011. Having taken various positions in Kodak's debt during the previous four years, GSO is now faced with a major decision. Under the company's recently proposed plan of reorganization, secured creditors were to be given 85% of the company's common stock, but unsecured creditors objected to the plan. Now, six months later, GSO has brought an amended plan to the table under which it would commit to backstop a $406 million equity rights offering that would be made directly to all the unsecured creditors. This offer might bring the objecting creditors on board but could also require an additional large capital commitment by GSO, which was already heavily invested in a highly troubled business that many viewed as a "melting ice cube."

Keywords

Restructuring; Finance; Strategy; Investment; United States

Citation

Gilson, Stuart C., John D. Dionne, and Sarah L. Abbott. "Eastman Kodak Company: Restructuring a Melting Ice Cube." Harvard Business School Case 216-006, August 2015. (Revised October 2023.)
  • Educators

About The Authors

Stuart C. Gilson

Finance
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John D. Dionne

Finance
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Related Work

    • April 2016 (Revised February 2017)
    • Faculty Research

    Eastman Kodak Company: Restructuring a Melting Ice Cube

    By: Stuart C. Gilson, John D. Dionne and Sarah L. Abbott
    • August 2015 (Revised October 2023)
    • Faculty Research

    Eastman Kodak Company: Restructuring a Melting Ice Cube

    By: Stuart C. Gilson, John D. Dionne and Sarah L. Abbott
Related Work
  • Eastman Kodak Company: Restructuring a Melting Ice Cube By: Stuart C. Gilson, John D. Dionne and Sarah L. Abbott
  • Eastman Kodak Company: Restructuring a Melting Ice Cube By: Stuart C. Gilson, John D. Dionne and Sarah L. Abbott
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