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Eastman Kodak received a big blow in its efforts to emerge healthily from bankruptcy after the opening bids in its patents auction came in at only around 10 percent of the value the company is seeking. Kodak was hoping to around $2.6 billion from the auction, but the initial bids, submitted on Monday, were in the range of $150 million to $250 million, according to the Wall Street Journal.
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Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG) are rumored to be leading the two opposing bidding groups, though a judge has asked for details to be kept secret until a conclusion is reached. Apple is reportedly being supported by Microsoft (NASDAQ:MSFT) and patent firm Intellectual Ventures, while Google has the support of patent aggregator RPX Corp and three manufacturers that make phones based on its Android operating system: Samsung, LG, and HTC.
While the presence of the two smartphone rivals in the bid was expected to drive the price higher, the low start may now mean that Kodak will be disappointed by the final figure it receives for its 1,100 digital imaging patents.
Kodak is also currently in court against Apple and Research In Motion (NASDAQ:RIMM) for the ownership of 10 of the patents. Last month, the U.S. International Trade Commission invalidated the photography company’s most lucrative patent, which governs how images are previewed in digital cameras. While Kodak has appealed, a verdict is not expected before the sale in complete.
The proceeds from the sale will first go toward repaying banks including Citigroup (NYSE:C) that gave Kodak a $950 million bankruptcy loan. Additional proceeds will be split among second-lien bondholders and the company. A winner is scheduled to be selected on August 13.
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