Board members of Eastman Kodak Company (PINK: EKDKQ)
, which filed for bankruptcy, have been sued by an employee over stock.
Mark Gedek, who continues to work at the bankrupt company, has sued EKDKQ’s Board members and other fiduciaries of the company’s retirement plans, alleging that they breached their duties as the company was headed toward bankruptcy. Gedek, who is a participant in the Kodak Employees Savings and Investment Plan and the Kodak Employee Stock Ownership Plan, said that Board members and directors of continued to sell shares to employees and invest in them ahead of the bankruptcy.
Kodak had filed for bankruptcy last month after failing to sell its portfolio of digital imaging patents. EKDKQ is looking to use the bankruptcy court process to try and sell patents and other non-core assets to bring its costs and revenue in line.
The Rochester, New York-based company said that it will defend itself against the lawsuit filed by Gedek. Christopher Veronda, a spokesman for the company, said that Kodak believes the suit is without merit and the company will vigorously defend against it.
Gedek has alleged in his lawsuit that the directors and officials at EKDKQ did not disclose to participants in the stock plan the complete information about the company’s financial position. Gedek said that EKDKQ should have known it was suffering a liquidity crunch. Despite these, directors kept investments in the company’s equity.
The defendants named in the lawsuit include CEO Antonio Perez, members of EKDKQ Board of Directors, the chairpeople for the savings and investment plan and the plan administrator.
In a separate development, earlier this week, a group of Kodak’s debtholders disclosed their stakes in the company in court filing. The three biggest investors in the group Blackstone’s GSO Capital Partners, D.E. Shaw, and J.P. Morgan Chase & Co. (NYSE: JPM).