Kodak Asking to Walk Away from Retiree Benefits

Talk about putting a nail in the coffin.  A month after they just filed for Chapter 11 bankruptcy protection, Eastman Kodak Co. has now asked in federal court that they be allowed to cut health care benefits for thousands of their retirees.  As they wrote in a letter to their retirees, since they’ve filed for bankruptcy they have had to “balance the needs of our retirees with the needs of the Company.”

The new changes would take effect as of May 1, 2012 if U.S. Bankruptcy Judge Allan Gropper approves.  Kodak has explained that these changes would affect 16,000 retirees and that the company would be able to save $13.5 million this year.

The letter that Kodak wrote to its retirees says,

“Among the legacy costs that must be addressed as part of our reorganization are retiree health care costs that are not borne by many of the companies we compete against in the marketplace. As we have changed these benefits over time, we have always tried to balance the needs of our retirees with the needs of the Company. It is now clearer than ever that in order to remain a participant in the market tomorrow, we must put Kodak on a sustainable financial path today.

You are receiving the enclosed legal motion because there is an important hearing scheduled on March 20, 2012, at which time the U.S. Bankruptcy Court will consider a planned change in Kodak retiree medical coverage that we believe will affect you. This letter summarizes the proposed change, which we believe represents a necessary step in Kodak’s efforts to become a competitive and sustainable enterprise during and after its Chapter 11 reorganization process. We urge you to read the entire legal motion enclosed with this letter and to consult an attorney with any questions you may have.”