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More Headaches at Kodak as Law Firm Organizes Shareholder Lawsuit

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The troubles continue at Eastman Kodak in the wake of a controversial proposed $756 million U.S. government loan to Kodak.

Not only is the U.S. Securities and Exchange Commission (SEC) investigating possible insider trading at Kodak, but an investor-rights law firm, Labaton Sucharow, announced on August 13th that it’s investigating “possible breach of fiduciary duty claims on behalf of Eastman Kodak Company as well as securities litigation claims.”

The firm explains that the investigation arises, in part, from a Kodak disclosure made in a Form 4 filed with the SEC (available at www.sec.gov) that Kodak’s CEO had been granted stock options on July 27, 2020, immediately before publicly disclosing that it had received a letter of intent for a $765 million loan from the U.S. International Development Finance Corporation to produce pharmaceuticals and a possible COVID-19 treatment, which Kodak would produce at its Eastman Kodak Business Park in Rochester, New York. The announcements on July 28th caused Kodak’s stock price to soar.

However, by August 10, 2020, Kodak shares plummeted 45 percent in  trading after the U.S. International Development Finance Corporation it was withholding its planned $765 million loan after the deal came under SEC scrutiny.

The law firm is asking current or past Kodak shareholders, and option or derivative holders of Kodak, to contact the law firm.

Meanwhile, some members of the U.S. Congress are questioning why Kodak was chosen to receive the loan, when it has virtually no drug-manufacturing experience. Fox Business also reports that Kodak spent some $870,000 in lobbying the federal government from April to June 2020, according to publicly available disclosures.
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