Kodak's film operations accounted for the vast majority of its legacy equity and revenues,a s well as its liabilities.

Those pensions and medical commitments, plus land taxes, decommissioning, etc. are also liabilities of the film operations.

Yet film demand has fallen by 10%+ YOY with a severe acceleration in the last 5 quarters, especially for motion picture film.

Revenues continue to decline but those obligations, especially the deferred HR ones, remain a liability against vastly smaller revenues.

It is mathematically impossible for film to have been profitable when outstanding obligations remain high but revenues decline by such staggering amounts. Kodak's rearguard action has been to focus on motion picture film and sell patents.

The concept that film's decline for Kodak being caused by a resource shift to digital is pure fantasy. What resources? The consumer has been abandoning film depriving the company of revenues.

In theory, the only way one can shift film into the black side is to remove those obligations through internal division mapping. This is not GAAP and no one buys that concept, which is one reason why EK is now a penny stock. Flailing about with pensions and patents is management desperation.

EK's debt obligations look to have replaced losses from the film revenues, as well as re-tooled the company for its digital efforts. Digital has growth potential so that could be termed "good" debt, but we'll see because the gamble on the consumer printer market is just that...a gamble. But no one realistically expects film to make a popular comeback so any debt applied to covering lost revenues there can only be "bad" debt because there's no ROI.

As much as we malign Kodak's management, they seem to have been quite good and managing film's decline, buying time and keeping as much loyalty as possible through consolidating products (Portra) and rationalizing their output. Very few companies could have taken a 90%+ collapse of demand, frankly, especially the loss of the pro market. It's their inability to maximize their early digital lead that is the corporate tragedy because it has robbed the company of options and a Ch. 11 will put a huge squeeze on the material supply, distribution, and credit of the whole rump film industry.