The Strategist

Kodak papers jump by 36% after due diligence on company is completed

09/17/2020 - 03:25

Eastman Kodak shares rose 36% after the start of trading on Wednesday - the reason for the increase was the publication of a report by a special committee that examined the possible premature disclosure of information about the company's loan from the US authorities.

The committee, although it found several omissions, concluded that no laws or company policies had been violated.

Recall that at the end of July it became known that Kodak received a targeted loan of $ 765 million from the US government to supply ingredients for the pharmaceutical industry; then the company's shares rose 300%.

However, the process of issuing the loan was soon suspended after media reports that some representatives of Kodak's top management could use inside information about the loan received to conduct transactions with sharply appreciated shares of the company by exercising their options.

Kodak has set up an ad hoc committee to investigate this situation, and has hired the law firm Akin Gump Strauss Hauer Feld to do so.

It found flaws in the company's internal policies, but concluded that the actions of Kodak's management were not insider trading.