In what has been a much anticipated restructuring, the 132-year-old American photo company, Kodak, has finally filed for bankruptcy protection under Chapter 11. Kodak has suffered after the coming of the highly competitive digital age and has faced heavy competition both by foreign companies as well as the digital industry, and most recently with the widespread use of smartphone cameras.

In the past decade, the company has been struggling to see profits and has reduced its workforce by nearly 50,000 employees. Many of its manufacturing plants and processing labs have been closed, and it looks like more will have to go. Inside bankruptcy, Kodak is hoping to streamline its business structure even further so that it can remain operational.

Of its $5.1 billion assets, Kodak still owns many patents -- some of which may still have significant value. However, Kodak is struggling with almost $7 billion in debts. In order to continue operating, Kodak is considering selling off its intellectual property portfolio. In an effort to boost the value of these assets, Kodak has filed several patent infringement lawsuits against its competitors, among them California-based Apple.

Kodak is not expected to exit from bankruptcy until at least 2013. This will be somewhat longer than a normal business bankruptcy because Kodak has many creditors with which it will need to negotiate. Among the major creditors that Kodak will have to work with are Disney Studios, Best Buy and Wal-Mart Stores Inc.

In the meantime, Kodak is hoping that an 18-month, $950 million credit facility will help this struggling company to continue operating through its restructuring.

Source: Los Angeles Times, "Kodak files for long-expected Chapter 11 bankruptcy," Tiffany Hsu, Jan. 20, 2012