Eastman Kodak Co. plans to eliminate retiree health care and survivor benefits by the end of the year.
The bankrupt photographic icon on Wednesday submitted a motion in a New York City court, asking to present the proposed deal it reached with the official committee representing retirees.
As part of the plan, Kodak wants to cut $1.2 billion in retiree obligations, saving it about $10 million a month. In return, Kodak would reportedly give the retirees committee $7.5 million in cash for initial administration and benefit obligations, a $635 million unsecured claim, and a $15 million allowed administrative claim.
The plan must be approved by the bankruptcy court.
The Eastman Kodak Retirees Association issued a statement late Wednesday saying it was “very disappointed.”
“EKRA realizes full well that this is a shock to the thousands of Kodak retirees, survivors and dependents. We will continue to push for factual communication from Kodak and the Official Retiree Committee, obtain other relevant information, determine possible alternatives and provide ongoing communication so Kodak retirees have as much information as possible to make their individual decisions,” EKRA said.
Kodak CEO Antonio Perez said the proposed plan is a “major step forward” toward Kodak’s successful emergence from bankruptcy.
Kodak filed for Chapter 11 bankruptcy protection in January and said at the time it would review its legacy cost structure, including retiree benefits, to determine ways to reduce expenses. The retiree benefits in jeopardy include medical, dental, life insurance and survivor income benefits.
Retiree pensions are not impacted by the proposed plan.
Many Kodak retirees live in the Tri-Cities region. Eastman Chemical Co. was part of Kodak until it spun off on Jan. 1, 1994, as a standalone company headquartered in Kingsport.