Eastman Kodak Company (PINK:EKDKQ)’s recent attempt to
sell off its digital patents has come under a cloud with a hedge fund investor
demanding a probe into the auction process and what it termed as `unusually
secretive" and collusive bidding.
Photography pioneer Kodak, which filed for bankruptcy
under Chapter 11 in January this year, has put up 1100 digital patents, worth
more than $2 billion on the block to raise money to pay off its debts
especially that relating to a $950 million bankruptcy loan by Citigroup, and
restructure itself.
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The bidding which started in early August was
conducted in some amount of secrecy with Kodak not revealing any details about
the bidders or the amounts received during the bids.
The Wall Street Journal then wrote a report which said
that the bids for the patents had come in at much lower levels than expected
and that Google and Apple had joined forces to collude together in the bidding
process.
Hedge Fund Esopus Creek Value Series Fund LP, that
holds a 9.75 percent in Kodak's senior secured notes, has dashed off a mail to Tracy Hop Davis the U.S. trustee
supervising bankruptcy proceedings in New York,
expressing concern over integrity in the auction process, Bloomberg
reported.
The mail read, "Under bankruptcy law we note that
the trustee is entitled to avoid any sale resulting from collusive
bidding."
A spokesman for Kodak when queried about the mail,
responded, "“The auction procedures were approved by the court, which also
ordered that all parties should maintain confidentiality, as we are
doing," Bloomberg said.
The auction was initially to end on August 16, but
Kodak extended
it and then subsequently said that it had not yet taken a decision whether
it would sell them or hold them.
The patents for sale relate to the capture,
manipulation and sharing of digital images.
Shares of the company ended higher by 23.08% to $0.24
on Monday.
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