It looks like no one — mama or otherwise — will be able to “take away” Kodachrome any time soon. After a serious PR and legal scare, Kodak emerged from court victorious, leading the company’s stock to, briefly, soar more than 80 percent.
Kodak had been in hot water because of an investigation into allegations of “insider trading” related to the company. After questions about the company’s stock situation and dealings went public, a committee hired the legal firm Akin Gump Strauss Hauer & Field to investigate the matter. The investigation was conducted and concluded, and then the committee was given an extensive report.
According to media reports, the investigators concluded that there were “no signs of Kodak breaking the law.” However, the report does indicate that the company may have “mishandled” stock options granted to Kodak’s CEO just before the company applied for a government loan. Despite the evidence of “mishandling,” the bottom line for Kodak is that the report stated that the Akin Gump firm found that “no laws were violated”… though they did inform Kodak leadership that the application for the loan was undertaken at a “highly uncertain stage.”
Along with the bottom-line conclusions, the report offered a list of action steps Kodak should make to avoid any semblance of similar wrongdoing going forward. This is a very important process as the company is expanding its product and service options in the wake of a transformed imaging industry.
In a statement released to the press, the company said it was committed to doing the right thing, adding: “Kodak 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…”
When this will happen and what it will look like is still an open question. Still, the big picture view is that Kodak has to be seen to be making some positive steps in the right direction if the company wants to accomplish what is necessary for its business to evolve in today’s dramatically different marketplace.
Company leadership has some very interesting and diverse ideas on the table, but to gain entrance into those markets, they need cash to invest, which is where the government loan comes into play. Kodak can’t be embroiled in any legal or public stock ethics violations if they want to find an investment partner to help open doors for them.
So, the results of this investigation are a PR win for the company. Not only was their brand cleared of these serious allegations, but they also have a clear shot at getting the open doors, they need to explore new opportunities.