Kodak 2013 Annual Report Download - page 17

Table of Contents
Subsequent to the Company’s Bankruptcy Filing, between January 27, 2012 and March 22, 2012, several putative class action suits were filed
in federal court in the Western District of New York against the committees of the Company’s Stock Ownership Plan (‘SOP’) and Savings and
Investment Plan (“SIP”), and certain former and current executives of the Company. The suits have been consolidated into a single action
brought under the Employee Retirement Income Security Act (“ERISA”), styled as In re Eastman Kodak ERISA Litigation. The allegations
concern the decline in the Company’s stock price and its alleged impact on SOP and SIP. Plaintiffs seek the recovery of any losses to the
applicable plans, a constructive trust, the appointment of an independent fiduciary, equitable relief, as applicable, and attorneys’ fees and costs.
Defendants’ motion to dismiss the litigation was heard on May 23, 2013 and has been taken under advisement. On behalf of the defendants in
this case, the Company believes that the case is without merit and will vigorously defend the defendants on their behalf.
On February 10, 2012, a suit was filed in federal court in the Southern District of New York against the Chief Executive Officer, the former
President and Chief Operating Officer and the former Chief Financial Officer, as a putative class action suit under the federal securities laws,
claiming that certain Company statements concerning the Company’s business and financial results were misleading and claiming alleged
resulting damages (Timothy A. Hutchinson v. Antonio M. Perez, Philip J. Faraci, and Antoinette McCorvey). The District Court granted
defendants’ July 2, 2012 motion to dismiss this case as against all defendants but granted the plaintiffs’ subsequent motion for leave to amend.
Plaintiffs filed a second amended complaint against only the Chief Executive Officer and the former Chief Financial Officer (Timothy A.
Hutchinson v. Antonio M. Perez and Antoinette McCorvey), in which they sought damages with interest, equitable relief as applicable, and
attorneys’ fees and costs. The District Court granted defendants’ motion to dismiss the case on April 25, 2013, and plaintiffs appealed. On
December 26, 2013, the Court of Appeals for the Second Circuit affirmed the decision of the District Court dismissing the case, finding that
plaintiffs had failed to plead facts with the particularity required to maintain their alleged causes of action.
On June 17, 2013 the Company, the New York State Department of Environmental Conservation and the New York State Urban Development
Corporation, d/b/a Empire State Development entered into a settlement agreement subsequently amended on August 6, 2013 (the “Amended
EBP Settlement Agreement”) which resolves certain of the Company’s historical environmental liabilities at Eastman Business Park (“EBP”)
through the establishment of a $49 million environmental remediation trust (the “EBP Trust”). Upon implementation of the Amended EBP
Settlement Agreement, (i) the EBP Trust will be responsible for investigation and remediation at EBP arising from the Company’s historical
environmental liabilities in existence prior to the effective date of the EBP settlement, (ii) the Company will fund the EBP Trust with a $49
million payment and transfer of certain equipment and fixtures used for remediation at EBP, and (iii) in the event the historical liabilities
exceed $99 million, the Company will become liable for 50% of the portion above $99 million. The Amended EBP Settlement Agreement is
not yet effective and is subject to the satisfaction or waiver of certain conditions including Bankruptcy Court approval of a covenant not to sue
from the US Environmental Protection Agency (“EPA”) with respect to the liabilities that are addressed in the Amended EBP Settlement
Agreement. The deadline for implementation of the Amended EBP Settlement Agreement is May 15, 2014.
The Company and its subsidiaries are involved in various lawsuits, claims, investigations, remediations and proceedings, including
commercial, customs, employment, environmental, and health and safety matters, which are being handled and defended in the ordinary course
of business. The Company is also subject to various assertions, claims, proceedings and requests for indemnification concerning intellectual
property, including patent infringement suits involving technologies that are incorporated in a broad spectrum of the Company’s products.
These matters are in various stages of investigation and litigation, and are being vigorously defended. Based on information presently available,
the Company does not believe that it is probable that losses for known exposures could have a material adverse effect on its financial condition
or results of operations. Litigation is inherently unpredictable, and judgments could be rendered or settlements entered that could adversely
affect Kodak’s operating results or cash flows in a particular period
None.
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ITEM 3.
LEGAL PROCEEDINGS
ITEM 4.
MINE SAFETY DISCLOSURES