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Kodak said CEO stock grants were mishandled before the big news



(Bloomberg)-Eastman Kodak Co. tried to resolve the violent storm of accusations surrounding Trump administration loans, saying it had improperly handled the process of granting stock option grants to its CEO before the announcement .

An independent legal review commissioned by Kodak found that before the company’s positive news came out, the company’s general counsel did not properly introduce to the board of directors the grant to CEO and executive chairman Jim Continenza (Jim Continenza) Legal risks. He received the grant the day before, and the Rochester, New York-based company revealed that as part of the Covid-19 government loan program, the company has received $765 million in rights to produce medicines.

Attorneys for Akin Gump Strauss Hauer & Feld LLP wrote in a report released on Tuesday evening: “The method of granting options is sub-optimal in many ways.” The lawyers believe that Kodak’s actions did not violate the law, although this situation is still in the United States. Under investigation by securities regulators and Congress.

Kodak said in a separate statement that it agreed to implement the report’s proposals, which included amending Continenza’s stock grant and reconsidering the composition of the board of directors.

The stock price of the former photography giant Kodak was less than US$3, and then unexpectedly entered the Covid-19 pharmaceutical company at the end of July, making the stock price as high as US$60. The company’s surge in lobbying spending in the first few months may help obtain a letter of intent from the International Development Finance Corp. to provide loans for Kodak to produce medicines. In the scandal that followed, the federal agency responsible for the loan put it on hold, pending investigation. Kodak shares closed at $6.23 on Tuesday.

Read more: Kodak intensified its lobbying efforts in a few months, which led to loans

The independent report resolved many legal problems faced by Kodak. The company said that the stock trading of Continenza and another board member Philippe Katz did not constitute insider trading, because the company’s general counsel had stated at the time that government loans were in a “highly uncertain stage.”

It is uncertain whether another director George Karfunkel’s donation of stocks to religious charities violates federal securities laws. The lawyer said that the gift “not showing up” was illegal. In a footnote, the lawyer wrote: “They have no record of the charity organization and cannot interview any of its officials or directors except Karfunkel.” The lawyer said that they relied on Kafunkel’s contribution to the donation. Described, this donation seems to be worth more than 100 million US dollars.

Kodak said that in addition to revising the grant and reassessing the composition of the board of directors, it will also consider strengthening the company’s legal team. Kantanza said in a statement: “Kodak is committed to the highest level of governance and transparency. It is clear from the review results that we need to take action to strengthen our practices, policies and procedures.”

(About the background of lobbying in the fifth paragraph, the latest situation)

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