WXXI AM News

Report: Inspector General for federal agency to review proposed Kodak loan

Sep 15, 2020

Credit WXXI Photo

The inspector general of the federal agency that helped put together a planned $765 million dollar loan for Eastman Kodak is reviewing that deal.

That’s according to the Wall Street Journal, which reported that the newly named inspector general of the U.S. International Development Finance Corporation told Senator Elizabeth Warren (D-Mass) last Thursday that his office was opening a review of the loan. That’s according to a spokeswoman for Warren, who called for further investigation.

The Journal says the inspector general for the DFC said he had been in touch with Warren’s office, but would not comment on ongoing audits, reviews or investigations.

The Securities and Exchange Commission already is investigating circumstances on how the loan was disclosed in July.

At that time, White House officials said the loan would help Kodak gear up to make ingredients used in generic pharmaceuticals. Kodak's stock price, and stock trading volume increased sharply before official word of the deal. Questions were also raised about stock options issued to some Kodak executives.

A spokeswoman for Kodak told WXXI News that, “Kodak appreciates and supports the DFC’s decision to seek clarity before moving forward with the process. The next step would be a diligence period before potentially committing financing.” Arielle Patrick notes that Kodak had received a letter of interest from the federal government when the loan possibility was announced, but that the loan agreement has not been finalized.

The DFC had tweeted in early August that, “Recent allegations of wrongdoing raise serious concerns. We will not proceed any further unless these allegations are cleared.” Kodak previously also said that it would conduct an internal review.