UPDATE 1-Kodak keeps control of bankruptcy through Feb. 28

Wed Nov 14, 2012 2:21pm EST

* Judge approves extension

* Plan would outline how to repay creditors, exit bankruptcy

* Kodak hopes to win court approval of plan in December

* Iconic company filed for bankruptcy protection in January

* Post-bankruptcy Kodak would likely look much different

By Nick Brown

NEW YORK, Nov 14 (Reuters) - Eastman Kodak Co won court permission on Wednesday to retain exclusive control of its bankruptcy case through Feb. 28 as it tries to execute a $793 million financing offer from a group of bondholders.

Judge Alan Gropper approved the extension at a hearing in a U.S. Bankruptcy Court in Manhattan, allowing Kodak to move forward with its plan without creditors pushing competing proposals. The plan would outline how to repay creditors and exit bankruptcy.

Absent the extension, the exclusivity period slated to end on Oct. 15 would have already lapsed. The extension was supported by most creditors, but was opposed by one group of bondholders, some of whom had made an unsuccessful effort to finance Kodak's emergence from Chapter 11.

Kodak announced on Monday it chose a $793 million loan package from Centerbridge Partners, GSO Capital Partners, UBS and JPMorgan Chase & Co.

The deal, which would need court approval, would require Kodak to receive at least $500 million for the sale of its patents.

Kodak filed for bankruptcy in January, hoping for a relatively speedy emergence fueled by the sale of its intellectual property. But bids have come in lower than expected, which Gropper acknowledged in approving the exclusivity extension.

"I think everyone would agree that there have been several disappointing aspects of this case," he said. "But I haven't heard that this is the result of anything other than the market."

A Kodak spokeswoman said in a statement on Wednesday that the company has made progress reducing costs through asset sales and streamlining its organizational structure.

"Kodak has stabilized its global cash position, its core commercial imaging business is performing well, and Kodak anticipates being global operating cash flow positive upon emergence from Chapter 11," spokeswoman Stefanie Goodsell said.

Kodak hopes to emerge from bankruptcy in the first half of 2013, its chief executive, Antonio Perez, said in announcing the financing deal on Monday.

Kodak will likely be a different company when it exits bankruptcy. In addition to selling its patent portfolio, it must sell all or part of its document imaging and personalized imaging businesses in order to convert the bondholders' loan package into post-bankruptcy financing.

That would mean a restructured Kodak would largely be out of the consumer business, focused instead on commercial imaging.

Kodak remains in talks for a patent sale with potential buyers, including Apple Inc and Google Inc. It said on Monday it is "confident" the patents will fetch the $500 million required under terms of the loan.

Kodak said it hopes to gain court approval of the plan in December, but no hearing date has been set.