Kodak Reaches Deal to Sell Patents for $525 Million

Eastman Kodak Co. (EKDKQ) said that a consortium led by Intellectual Ventures and RPX Corp. (RPXC) agreed to pay roughly $525 million to acquire and license the one-time photography giant's patents, helping Kodak move closer to its goal of emerging from bankruptcy during the first half of next year.

Kodak said the transaction, which requires bankruptcy court approval, also settles patent-related litigation with the buyers.

The company said the patent sale also will allow Kodak to pay a substantial portion of its initial borrowings to cover bankruptcy costs and satisfy important requirements for a new financing facility.

Last month, the company struck an agreement with creditors for $830 million in loans -- but the loan was premised on the condition that Kodak sold the patents for at least $500 million.

Once a Blue Chip company that employed 145,000 people world-wide at its peak in the 1980s, Kodak has endured a long slide as the rise of competitors and technological change ate into its lucrative near-monopoly on selling film. It now faces steep challenges as it tries to emerge from Chapter 11 as a much smaller company with less diverse operations.

Kodak said the patent sale will allow Kodak to support its commercial imaging technologies that will be a company focus going forward.

Write to Tess Stynes at [e-mail]

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