Chairs Clyburn, Waters, Maloney Seek Documents on Kodak Loan and Windfall for Executives
Washington, D.C. (August 5, 2020) — Rep. James E. Clyburn, Chairman of the Select Subcommittee on the Coronavirus Crisis, Rep. Maxine Waters, Chairwoman of the Committee on Financial Services, and Rep. Carolyn B. Maloney, Chairwoman of the Committee on Oversight and Reform, sent a letter to James Continenza, Executive Chairman of the Eastman Kodak Company, requesting documents and information regarding a $765 million federal loan to support the production of ingredients for generic drugs, as well as trading activity by company executives before this loan was publicly announced.
“Companies and individuals that receive federal funds in response to the coronavirus crisis must follow the law and not engage in abusive practices,” the Chairs wrote. “DFC’s decision to award this loan to Kodak despite your company’s lack of pharmaceutical experience and the windfall gained by you and other company executives as a result of this loan raise questions that must be thoroughly examined.”
The Chairs, along with Chairman Eliot Engel of the Financial Services Committee and Chairman Al Green of the Financial Services Committee, Subcommittee on Oversight and Investigations, also sent a letter today to Adam Boehler, Chief Executive Officer of the U.S. International Development Finance Corporation (DFC), seeking documents related to this loan.
On July 28, 2020, DFC announced that Kodak will be awarded a $765 million federal loan to support the production of pharmaceutical ingredients. This loan was the first announced by DFC pursuant to a May 14, 2020, executive order authorizing DFC’s Chief Executive Officer to exercise loan authority under the Defense Production Act in connection with the coronavirus pandemic.
In an interview with CNBC, Continenza acknowledged Kodak had been working on this loan deal for a “few months” before the public announcement.
The company reportedly awarded 240,000 stock options to its board members on May 20.
SEC filings show that on June 23, Continenza purchased roughly 46,700 additional shares and board member Philippe Katz purchased 5,000 shares.
On July 27, the day before the loan award was announced, Kodak’s board of directors awarded 1.75 million stock options to Continenza.
Following a nearly 1,500 percent increase in the value of Kodak stock last week, Continenza’s holdings reportedly gained about $83 million in less than two days, with roughly $30 million of that value from gains on the options granted on July 27 alone.
The Chairs’ letter to Kodak seeks documents related to DFC’s loan to Kodak, Kodak’s decision to issue stock options to its chairman and board members, and executives’ purchase of shares during the period in which Kodak was in confidential negotiations with DFC regarding the loan.
Click here to read today’s letter to Kodak Executive Chairman James Continenza.
Click here to read today’s letter to DFC CEO Adam Boehler.