Kodak bondholder wants probe of patent auction

A New York hedge fund that owns bonds of bankrupt Eastman Kodak has asked the U.S. Trustee to probe the company’s patent auction because it was concerned about the “unusually secretive” bidding process, Reuters and Bloomberg reported Tuesday.

Kodak, which filed for bankruptcy in January and employs about 600 in Kettering, began selling 1,100 digital patents in early August and extended the auction last week, citing ongoing discussions with bidders. The company would use the proceeds to pay back investors after borrowing nearly $700 million in bankruptcy financing.

Esopus Creek Value Series Fund LP, holder of Kodak’s 9.75 percent senior secured notes, said press reports about two lead bidders, Apple Inc. and Google Inc., joining forces led the fund “to be concerned as to the integrity of the bidding process,” Bloomberg reported, citing a letter from the fund to Tracy Hope Davis, the U.S. trustee who supervises bankruptcies in the New York region.

Google could not be reached for comment by telephone outside U.S. business hours, while Apple spokesman Steve Dowling did not immediately reply to calls and an email seeking comment.

“The auction procedures were approved by the court. These include confidentiality for all parties, as we are mindful,” Kodak spokesman Christopher Veronda said in an email, when asked to comment on Esopus Creek’s reported request for a probe into the patent sale.

Esopus Creek and the office of the U.S. trustee could not be immediately reached for comment outside usual business hours.

Thank you for reading the Dayton Daily News and for supporting local journalism. Subscribers: log in for access to your daily ePaper and premium newsletters.

Thank you for supporting in-depth local journalism with your subscription to the Dayton Daily News. Get more news when you want it with email newsletters just for subscribers. Sign up here.