The review, commissioned by Kodak, found that the company’s general counsel didn’t properly brief the board on legal risks of providing the grants to
“The manner in which the options grants were awarded was sub-optimal in a number of respects,” the lawyers at Akin Gump Strauss Hauer & Feld LLP wrote in the report released Tuesday evening. The lawyers determined that Kodak’s conduct didn’t violate the law, although the situation remains under investigation by U.S. securities regulators and Congress.
In a separate statement, Kodak said it agreed to carry out the report’s proposals, which include amending Continenza’s share grants and reconsidering the board’s composition.
Kodak, the photography giant of yesteryear, was trading at less than $3 before the surprise move into Covid-19 pharmaceuticals in late July drove the stock price to as high as $60. In the resulting scandal, the federal agency that awarded the loan placed it on hold pending the investigations. Kodak’s stock closed at $6.23 on Tuesday, before spiking on Wednesday.
The company’s report addressed a number of legal quandaries facing Kodak. It said stock transactions by Continenza and another board member, Philippe Katz, didn’t constitute insider trading because the company’s general counsel had said at the time that the government loan was at “a highly uncertain stage.”
A conclusion was less definitive on whether the donation of shares by another director,
Kodak said it will consider beefing up the company’s legal team, in addition to revising the grants and reassessing the boardroom makeup. “Kodak is committed to the highest levels of governance and transparency, and it is clear from the review’s findings that we need to take action to strengthen our practices, policies and procedures,” Continenza said in a statement.
(Updates first paragraph with information about share price)
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