WXXI AM News

Kodak releases findings of review into its financial practices

Sep 16, 2020

Eastman Kodak is releasing findings from an internal review of its financial dealings in connection with the allegations swirling around the possibility it might get a $765 million federal loan to make ingredients used in pharmaceuticals.

The company commissioned an independent legal review of issues including how stock options were granted to executives, and the timing of the announcement of the potential loan.

The agency providing the loan, the U.S. International Development Finance Corporation (DFC), said in August that it would not proceed with the loan unless the company is cleared of allegations of wrongdoing. 

The report released Tuesday evening recommended some changes in Kodak’s corporate governance policies, but said the company did not violate the law.

Akin Gump, the law firm retained to do the investigation, said in the report that “Kodak, and its officers, directors, and senior management did not violate the securities regulations or other relevant laws, engage in a breach of fiduciary duty, or violate any of Kodak’s internal policies and procedures.”

Those issues were raised after Kodak stock skyrocketed after the announcement of the potential federal loan in late July. There have been questions raised about whether there was insider trading.

Among the recommendations in the report released Tuesday is that Kodak make sure its legal department has enough resources to carry out its tasks.

Kodak’s Executive Chairman and CEO Jim Continenza released a statement saying that the company “is committed to the highest levels of governance and transparency, and it is clear from the review’s findings that we need to take action to strengthen our practices, policies and procedures.”

The company is still facing other reviews of its financial practices. The Securities and Exchange Commission has been investigating as well as some members of Congress.

Shares of Kodak stock rose sharply Wednesday, gaining $2.28 a share to close at $8.51, a more than 36% increase.