Here’s a good one for you – It’s Carl Icahn’s fault that Blockbuster Inc. is in the sad state it is in today. At least that’s the view of disgruntled junior bondholder Lyme Regis Partners, who claim in a lawsuit that Icahn set the video retail chain to fail so that he could take over the company (as reported on Dow Jones Daily Bankruptcy Review).
The lawsuit goes on to allege that because of his insider status, Icahn had a much better view of how bad things were for Blockbuster and there that allowed allowed him to position himself ahead of the other investors because he knew before everyone else that the company was much closer to bankruptcy.
After the market closed on Sept. 16 (this past Wednesday), Eastman Kodak Co. announced a plan to refinance $575 million of its 3 3/8% convertible notes through two separate private placements. Good news for the holders of these bonds because they would get paid par, or the full $1,000 for each bond they held. But somebody may have known something about this deal before others.
Antonio Perez, the charming chief executive officer of Eastman Kodak Co., spoke with Dow Jones Newswires and Wall Street Journal editors this morning. As entertaining a breakfast companion as he proved to be, Perez exuded frustration. Short-sighted shareholders, he complained, won’t give companies such as his enough time to develop innovative products. Then there’s Kodachrome film: People blame him for its recent demise. “We didn’t kill it! It died a natural death!” he said, smiling, but with more than a trace of bitterness. And yet — small and shrinking, Kodak has a viable future, Perez contended. Its stock is disappointingly low; today it was on track to close at $2.70, down around 6%. But the company has enough cash to survive – if the economy has bottomed out and begins to gradually recover, according to its CEO. And if a persistent economic crisis erodes Kodak’s cash stash, the company will recapitalize and has plenty of suitors willing to bet on it as a stand-alone company, he said. Perez’s charm slid into too-cuteness when he tried to make the case that the traditional printing business has a decent future. Do you know how many trillions of pieces of paper get printed each each year? he asked us. Seventy-six trillion pages a year worldwide was his reckoning. As if this factoid – true or not – could possibly represent the salvation of an old-fashioned company, albeit one with a great heritage.
