Kodak Selling Your Information to Shutterfly

Eastman Kodak has agreed to sell its online photo services business to Shutterfly (NASDAQ:SFLY) for $23.8 million. The sale is likely to be one of many as Kodak exits the camera business. The company is expected to fetch $1 billion to $2 billion from the sale of about 1,100 digital patents, which is due to get under way by June 30.

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But a dispute with Apple (NASDAQ:AAPL) over one of the patents may complicate matters. At a hearing on March 8, a bankruptcy judge will hear Apple’s motion to move forward with its patent-infringement suit. Apple has requested that the bankruptcy court lift the automatic stay applied to pending litigation against Kodak when the company filed for Chapter 11 on January 19.

Kodak said the deal with Shutterfly is only a “stalking horse” bid, which means the business can still be sold to another company, but that other bidders must beat out Shutterfly in a court-supervised auction.

Shutterfly said it will transfer Kodak Gallery customer accounts and images to Shutterfly, and will allow customers to opt out of the transition. Kodak is focusing its consumer business on retail and destination photo solutions as well as home printing products, according to Pradeep Jotwani, president of consumer businesses and chief marketing officer of Kodak.

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