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The financial futures of 15,500 Londoners were at risk today when 130-year-old photography firm Kodak filed for bankruptcy protection.
The firm had a huge manufacturing plant in Harrow, which at its peak employed 6000 staff and still has over 1000 today. Kodak last year agreed
to inject $800 million into the UK pension fund over the next decade to fill a massive shortfall.
But today the company's ability to meet that
promise was in major doubt today. Lawyers warned that Kodak's filing for Chapter 11 bankruptcy protection meant it would be able to shut
unprofitable operations and cut back on its pension obligations.
Although the UK Pension Regulator has been given aggressive legal powers to put pensioners at the top of the list of creditors of collapsed,
overseas companies, in practice, it has never succeeded in doing so in US courts.
Helena Berman, litigation partner at City lawyer Maurice Turnor Gardner, said: "The pensions regulator has been given the teeth to go after pension schemes in other jurisdictions such as the US, but every time it's tried to so, it has been challenged. For the Kodak pensions, it's a case of
wait-and-see."
The Kodak UK pension trustees - who are being advised by City law firm Hogan Lovells - may attempt to claim priority over other creditors? claims in the US. Hogan Lovells declined to comment.
A spokesperson for The Pensions Regulator said: "We are aware that the US parent company, Eastman Kodak Company, has filed for Chapter 11 bankruptcy
protection. We are in contact with the UK pension fund trustees."
Kodak - which was founded by George Eastman in 1880 - was known for its paternalistic workplaces, with excellent benefit schemes and pension deals
for staff.
