M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

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Thursday, October 27, 2011

Kodak - you have been warned

Apparently a group of creditors sent a letter to the Eastman Kodak board to remind them that they are required to get "fair value" for any assets they might sell, including the Kodak patent portfolio.  In a sale of substantially all the assets of a firm its necessary for a board to ensure that it receives "reasonably equivalent value" for the assets sold.  This is, in part, to prevent sellers from using the asset sale as a fraudulent conveyance.  The fear from creditors of Kodak is that Kodak might sell its patent portfolio and then file for bankruptcy protection, leaving creditors to take a hit.  The creditors are looking to put maximum pressure on Kodak's board before a sale to try to incentivize the Kodak board to get the highest price possible for those assets. 

-bjmq

http://lawprofessors.typepad.com/mergers/2011/10/kodak-you-have-been-warned.html

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Comments

Spanish bankrupcy Law rules 2-year period of monitor-back the protected company.So the jugde may review any sale/transaction within previous 2 years to the CH11 file, and even turn them down. This retroaction only requires damage, no matter intention of the parties. this rule soars insecurity but keep CEO┬┤s hand off the cake.

Posted by: Miguel | Oct 29, 2011 3:40:08 AM

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