Kodak replaces chief restructuring officer
James Mesterharm, who works for the consultancy firm AlixPartners and was chief restructuring officer for Parmalat USA during the dairy company's bankruptcy, will replace Dominic DiNapoli of FTI Consulting Inc, who was chosen last week.
Kodak said in a statement that there was no "disagreement or difference of opinion" with DiNapoli and provided no further explanation for the change.
The company also said FTI would continue to work alongside AlixPartners on certain matters during the bankruptcy.
"This is a very unusual move," said Ted Gavin of turnaround consultants NHB Advisors Inc. "Typically the relationship of CRO is one, especially in large corporate bankruptcies like Borders or Kodak, that is vetted early enough that you have a chance to make sure that anything that gives rise to a replacement is addressed early in the process."
AlixPartners also replaced FTI during the restructuring of book store chain Borders Group Inc.
A Kodak spokesman said the company was not aware of any conflict of interest involving DiNapoli.
Kodak, the photography icon that invented the hand-held camera, filed for bankruptcy protection last Thursday, capping a prolonged plunge for one of America's best-known companies.
The Chapter 11 filing makes Kodak one of the biggest corporate casualties of the digital age, after it failed to quickly embrace more modern technologies such as the digital camera -- ironically, a product it invented.
The change of restructuring officers was announced as Citigroup Inc was beginning to syndicate a bankruptcy loan it had agreed to provide Kodak to fund its operations while in Chapter 11.
The loan, for up to USD 950 million, requires Kodak to hire a restructuring officer that is approved by Citigroup.
Kodak's noteholders objected to the company's plans to take on such a large bankruptcy loan, arguing that the company does not have a viable turnaround plan.
Michael Stamer, a lawyer who represents the noteholders, did not return a call for comment.