Government Puts Controversial $765 Million Kodak Loan on Hold
On August 7th, the U.S. International Development Finance Corporation stated that it’s putting its proposed loan of $765 million to Eastman Kodak on hold. The agency stated: “Recent allegations of wrongdoing raise serious concerns. We will not proceed any further unless these allegations are cleared.”
On July 28th, the U.S. International Development Finance Corporation announced that it had submitted a letter of intent to provide the loan to Kodak. In return, Kodak would use the loan to produce pharmaceuticals at its Eastman Business Park in Rochester, New York. The loan was said to be part of a U.S. government strategy to begin production of critical pharmaceuticals in the United States, since the COVID-19 pandemic has resulted in the shortage of some key drugs, which had been produced overseas primarily in China and India.
According to the The Wall Street Journal, the U.S. Securities and Exchange Commission is also reportedly investigating how Kodak disclosed the deal with the government. Kodak executives are said to have announced the deal to some local reporters in Rochester on July 27th – a day before the “official” announced by the U.S. International Development Finance Corporation – which was subsequently followed by unusual trading activity.
Kodak Internal Review
On August 7th, Kodak also announced that it was conducting an internal review of the matter.
Kodak announced the appointment of a special committee of independent directors of the Kodak Board. This committee, comprised of directors Jason New and William G. Parrett, will oversee an internal review of recent activity by Kodak and related parties in connection with the announcement of a potential loan by the U.S. International Development Finance Corporation to support the launch of Kodak Pharmaceuticals.
The internal review will be conducted for the committee by Akin Gump Strauss Hauer & Feld LLP. Kodak will not make further public comment on the committee’s work during the review.
- August 2020: Securities & Exchange Commission Investigating Kodak
- July 2020: Kodak Slated to Begin U.S. Pharmaceutical Manufacturing