Jan 31 (Reuters) - An Eastman Kodak employee filed a
civil lawsuit against Kodak's board members and other
fiduciaries of the photography companies' retirement plans,
saying they breached their duties as the company was spiraling
Mark Gedek, who continues to work at Kodak, said in the
lawsuit that he is a participant in the Kodak Employees Savings
and Investment Plan as well as the Kodak Employee Stock
Ownership Plan. The board members and directors of those plans
continued to sell shares to employees and invest in them ahead
of the bankruptcy, he said.
"Kodak believes the suit is without merit, and we will
vigorously defend against it," Kodak spokesman Christopher
Veronda said in an emailed statement.
Kodak filed for bankruptcy in mid-January, saying it would
use the bankruptcy court process to try to sell patents and shed
other assets to bring costs and revenue in line. Typically in
bankruptcy, shareholders' equity is worth nothing.
Kodak shares, which trade for 34 cents on the pink sheets,
were trading at 55 cents on Jan. 18 before the company filed for
Gedek said in the lawsuit, which seeks class-action status,
that the directors and officials did not disclose to stock-plan
participants complete information about Kodak's dire financial
condition and kept its investments in the company's equity when
it was no longer prudent.
In the suit, Gedek said the company should have known it was
suffering from a dying technology; was unable to bring new,
profitable products to the market quickly enough; could not
generate enough cash from patent lawsuits and was suffering from
a liquidity crisis.
He also claims that those factors caused the stock price to
collapse and caused significant losses to the plans and the
Among those named in the lawsuit as defendants are Kodak
Chief Executive Officer Antonio Perez, members of the company's
board of directors, the chairpeople for the savings and
investment plan and the plan administrator.
Separately, a group of Kodak debtholders disclosed their
stakes in the company in a court filing late on Monday. Among
the three biggest investors that make up the group - which had
been pushing Kodak for change in the months before the
bankruptcy - are the Blackstone Group's GSO Capital Partners,
D.E. Shaw and JPMorgan Chase.
The case is Mark Gedek v Antonio Perez et al, U.S.
District Court for the Western District of New York in
Rochester, No. 12-06051.
For Gedek: Nadeem Faruqi of Faruqi & Faruqi.
For Perez: Not immediately available.
The bankruptcy case is in re: Eastman Kodak Co et al, U.S.
Bankruptcy Court, Southern District of New York, No. 12-10202.
(Reporting By Caroline Humer)
Follow us on Twitter: @ReutersLegal