Eastman Kodak's prized imaging patents will soon be in the hands of three of the world's biggest tech companies.
Kodak announced Wednesday that it struck a deal to sell its patents to a consortium led by Intellectual Ventures and RPX Corp. The consortium also includes tech giants Apple, Microsoft, and Google, Dow Jones reports.
Last month, Kodak secured $830 million in loans from creditors. The loan, however, is contingent on Kodak selling its patents for at least $500 million. While that's a huge sum, Kodak originally estimated that the patents were worth up to $2.6 billion.
The imaging patents have been a key part of Kodak's bankruptcy plan since the beginning. The company initially considered licensing the patents before deciding on a sale. The money from the sale will help Kodak pay off its creditors and cover bankruptcy costs.
In addition to the big three tech companies, Facebook, Amazon.com, Adobe Systems, Samsung Electronics, HTC Corp., Fujifilm, and Shutterfly are included in the consortium. However, these companies won't be buying the patents. They'll instead license the patents from buyers Intellectual Ventures and RPX Corp.
Kodak was once a giant in the photography market, employing 145,000 worldwide. However, consumer film sales dropped dramatically with the rise of digital photography.
Kodak filed for Chapter 11 bankruptcy back in January. Companies in a Chapter 11 often cut costs and repay creditors by laying off workers, renegotiating contracts, closing branches, or selling assets.
Kodak has since laid off thousands of workers, shut down its camera-film business, and cut pension benefits. It now plans to emerge from bankruptcy as a much smaller, more focused company.
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