Eastman Kodak’s (NYSE: EK) board of directors has been invisible as the company first intimated it would not need new funds, and then a short time later said it had potential cash problems. The board’s inactivity probably has cost Kodak shareholders dearly, and likely will continue to do so.
At the end of last month, Kodak said rumours of a Chapter 11 filing were untrue. The company had drawn $160 million from one of its lines of credit. A spokesman for Kodak said, “The purpose of the revolving credit facility is to bridge timing differences between cash outflows and inflows, which is a common practice at many corporations.” A timing difference is generally not considered an emergency.
Kodak’s position changed suddenly on November 3. The company said it probably would need money soon as it reported earnings.
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