Small business owners in Kentucky and Ohio may read about high profile bankruptcy filings in the news. One much anticipated recent bankruptcy filing involves Eastman Kodak Co. Kodak, an American icon, has recently filed for bankruptcy protection under Chapter 11, which is also known as a restructuring.

The hope is that during the next year, the company will be able to sell off some of its assets, such as it extensive intellectual property portfolio, along with negotiating with several of its many creditors, in order to figure out a way that it can survive in an increasingly competitive industry.

Kodak has been the victim of patent infringement on some of its many patents that it holds, some of which continue have real value. Kodak apparently suspects that it may have been the victim of widespread patent infringement because of its volatile financial situation, and its questionable ability to pursue prosecution. However, in an effort to revive the company, Kodak is seeking compensation in several patent infringement lawsuits, including one such lawsuit against Apple.

Kodak has been struggling with decreasing revenue for many years now. Kodak has also been forced to decrease its workforce by as much as 73 percent in an effort to trim its business operations and concentrate on digital technology.

It is important for small business owners to understand that Chapter 11 is not necessarily the only option when faced with difficult financial situations. In some cases Chapter 13 may be more advisable and may provide more benefits, than filing for bankruptcy under Chapter 11, especially for small business owners. Bankruptcy law is quite complex, and a thorough analysis of a business's situation would be necessary in order determine what form of bankruptcy is most appropriate.

Source: The Wall Street Journal, "Kodak Bankruptcy By the Numbers," Shira Ovide, Jan. 19, 2012