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On the day Kodak filed for bankruptcy, CEO Antonio Perez led a town hall-style meeting with employees. Here are the highlights from the audio, which I posted on 13WHAM News:

– Kodak’s code name for its contingency plans that included bankruptcy was Project Cartier. A bankruptcy consultant left his watch on the corporate plane. “By the way, we won’t have planes anymore,” Perez said. There was a slow clap. “Go on and clap.” The room burst into applause.

– Less than 24 hours before Kodak filed for bankruptcy, Perez thought he had a deal to sell the patents and keep Kodak afloat. For 45 minutes, he thought the company would avert Chapter 11. It didn’t happen.

– Perez said Kodak held onto the film business because it’s a buyers market and it made more financial sense to hang onto it.

– Perez thought Kodak’s restructuring was over in 2007. “Baby, we’re going to the Olympics!” But then the recession hit.

– Perez knows he’s not too popular. “I have four dogs. They love me when I get home. They lick me up and down. They take care of all those problems. Of course, my wife and my daughter too. I know you are tweeting these things. That’s why I had to say that.”

– Perez blamed the media for the company’s inability to sell the patents and for reporting on nostalgia. He said reporters might “grow up” one day and realize it’s not 1890 anymore.

About those patents…

During the meeting, an executive revealed the price of the patents goes up in a bankruptcy:

If we kept on the same path we’ve been on for the next 5, 6, 7 years, just licensing to companies one by one, how much money would we generate? And that model shows $6 billion through licensing over next 4 years. It’s a very valuable asset.

What would this be in the hands of Google against Apple or in the hands of Apple against Android or in the hands of Sony against Apple or in the hands of Apple against HTC? These are all companies that are really warring with each other in the wireless space. That’s probably a bigger value. We can’t gauge it.

In this formal process…when parties are made to come oout of the dark shadows and come to the table…that competition will drive the price up as it did with the Nortel portfolio.

5 Responses to Project Cartier

  1. February 1, 2012 at 6:31 pm Pat McDermott responds:

    I’m saddened to see that few local media outlets are not decrying Kodak’s transition into a patent troll. The patent troll is the final and last evolution of a company that cannot innovate and is doomed to fall shortly. A patent troll is a company that no longer creates any real products. It simply relies on licensing fees and litigation against companies and people who violate their patents. Now, this would be far less problematic if the company was investing in the creation of truly new technologies that provided benefit to society. Instead, the sort of patents I hear about from Kodak are trivial and obvious. For example, the most recent, well known litigation brought forth by Kodak was for a digital camera that produces a low resolution preview. The local media should be slamming Kodak for going down a path that is a drain on innovation, not wistfully talking about some magic source of revenue that might save the company. It will not. There is precedent, just look up SCO and Linux.

    Further reading on the shameful direction of Kodak: http://www.venik4.com/2011/01/kodak-learns-the-art-of-patent-trolling/

  2. February 1, 2012 at 7:58 pm A Kodaker Who Was There responds:

    So here is an interesting observation. Mr Perez referenced “The Man In the Arena”, a speech given by Teddy Roosevelt, as his retort to all the recent media articles offering their ““Monday morning arm chair quarterbacks” analysis on Kodak should have done this, or should have done that back when. . .

    The notable passage in the speech is quite good. The interesting part is this passage was also used by Richard Nixon on August 8, 1974 in his resignation address to the nation!

  3. February 1, 2012 at 8:15 pm Brian Kane responds:

    Well Rachel, I hope you’ve learned your lesson and that you’ll grow up some day 😉

  4. “They lick me up and down. They take care of all those problems. Of course, my wife and my daughter too.”

    Newspaper style might have been better here – “Of course my wife and my daughter [love me] too.” There’s some disturbing unintentional ambiguity in the original. Especially for his daughter.

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