Sony wants the $18 million owed to it
San Francisco, CA -- (SBWIRE) -- 03/01/2013 -- After strong objections from the Sony corporation, a judge has agreed that the Kodak company used its business judgment to reject the supplier agreement in owed rebates, which places the companies' relationship in murky water.
Sony Pictures Entertainment and Eastman Kodak are now facing a rather difficult road ahead with one another, after the judgment came down from a judge who sided with the latter.
The bankruptcy judge canceled the current film-supply contract that was being held between the two companies, which effectively takes Kodak off the hook for $18 million that is owed to Sony.
The Kodak company is a storied film company that stood in business for 132 years alongside Hollywood. Now, the company has fallen on its hardest times and thus filed for Chapter 11 bankruptcy in January of 2012.
Within its official filing, Kodak revealed that it had owed at least $51 million to major studios. That debt was said to come from tax credits, discounts, and incentives offered to studios when they were buying Kodak film for motion pictures.
Last August saw Kodak request approval for a new supplier agreement to Kodak with Disney, Warners, and Paramount, NBCU. Sony had been left off that list, and so was the rebates that totaled over $18 million.
Kodak then asked a judge to reject the executory contract with Sony, which in turn had Sony up in arms and demanding satisfaction. The company stated that after the bankruptcy filing of Kodak, that it had "continued to negotiate in good faith to reach a mutually agreeable purchasing arrangement going forward."
Sony also noted that since Kodak's bankruptcy, the former had purchased over 450 million feet of motion picture film from latter. Still, the Kodak company broke off negotiations on new supplying agreement, despite being close to a deal. After Kodak's motion of rejection to supply agreement, Sony stated that "the timing of the motion belies Kodak's true purpose -- it is clearly trying to deny SPE an allowed administrative expense claim for the post-petition rebates that have accrued and are now due and payable."
The administrative expense was $9.4 million.
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