Sep 16, 2020
Review finds flaws in how Kodak handled CEO stock grants
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Shares of Kodak are sharply higher after an independent legal review found that while there were flaws in how Eastman Kodak issued stock option grants to its CEO just before revealing a major development that sent its stock soaring, no illegality was involved.
In late July the U.S. International Development Finance Corporation signed a letter of intent to potentially give the photography pioneer a $765 million loan to help pay for factory changes needed to make pharmaceutical ingredients in short supply in the U.S.
Shares surged from around $8 to more than $33 each in a day, at one point soaring as high as $60, a price that has not been seen for years at Kodak whose fortunes faded with the arrival of digital photography.
The grants to the companies CEO, as well has a huge donation of company stock by a board member around the same time to an affiliated charity, caught the eye of both shareholders and regulators, as did highly active trading in Kodak shares the day before the announcement.
White house trade advisor Peter Navarro, who played a part in the process, blasted the company.
“Based on what I’m seeing, what happened at Kodak was probably the dumbest decisions made by executives in corporate history,” Navarro said on CNBC.
The DFC put any consideration of a loan on hold until the allegations of insider trading are cleared.
Those investigations are ongoing. The DFC would not comment on Kodak’s internal investigation Wednesday.
The review by the law firm Akin Gump Strauss Hauer & Feld, commissioned by a special Kodak board committee, found that Kodak’s general counsel failed to warn the company’s board that the timing of the grants for Executive Chairman and CEO Jim Continenza could look bad regardless of whether the grants were determined to be legal. Continenza and other senior Kodak executives were awarded the grants the day before the potential loan was announced.
Regarding insider trading allegations, the review determined that Continenza and board member Phillipe Katz properly complied with Kodak’s insider trading policies. The approval of the trades was appropriate, it found, because the loan application process was at a highly uncertain stage at that time they were cleared.
Akin Gump Strauss Hauer & Feld also said it did not appear that a donation of 3 million Kodak shares by board member George Karfunkel to an affiliated charity at the same time, and suddenly worth a lot more money, violated federal securities laws.
A special committee formed by Kodak said the company should reconsider the makeup of its board, particularly given the change in what type of entities now own company stock.
Kodak said late Tuesday that it planned to review and implement the committee’s recommended measures and that it continues to assist with all other inquiries on these matters.
“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.
Shares of Eastman Kodak Co., based in Rochester, New York, jumped about 60% in early trading.
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School board meeting erupts after fourth grade teacher distributes pro-Black Lives Matter curriculum to class
A school board meeting erupted into a shouting match this week over controversy surrounding a fourth grade teacher passing out Black Lives Matter literature to students.
“Is the teacher pushing her own personal agenda on the students?” one board meeting attendee said about the controversy which was not on the official agenda but came up anyway. “The answer is yes.”
According to Fox 6 News, the teacher at Cooper Elementary School in Burlington, Wisconsin, recently passed out Black Lives Matter messaging to students that included questions such as "What are people protesting?" and "How can we stop systemic racism?"(Screenshot / FOX 6)
The teacher, identified as fourth grade teacher Melissa Statz, was reportedly hired last month and has received support from members of the community.
"Black Lives Matter is not religious. It is not political. It is a human right," said Darnisha Garbade, who heads the Burlington Coalition to Dismantle Racism.
"Why would parents get so angry about their children learning how to value the lives of black and brown people?" she added. "To me, that's even more of a reason why the district needs to take action."
The school district superintendent explained that the material was not approved by school officials.
“We learned last night that a fourth grade classroom at Cooper Elementary School shared Black Lives Matter resource materials as part of a conversation and social studies lesson,” Superintendent Steve Plank said. “The use of this resource was an individual decision, not part of the approved curriculum for Cooper Elementary School or the BASD. When we explored why this material was used, we learned that the class discussion ranged from how police officers protect us to why protests sometimes turn violent.”
Additionally, Plank staff have been reminded to “use supplemental resources that are age and developmentally appropriate without religious or political influence.”
Images obtained by Washington Examiner from a Burlington school district alumnus show literature teaching the children about George Floyd, who was killed by police on May 25, and linking that death to "systemic racism."
"On May 25 he [George Floyd] was killed by a police officer who forced his knee on George's neck," one page read. "George could not breathe and he died. People all around America and the world saw videos of this and became very angry and upset."
The description of Floyd's death without additional context was followed by a paragraph about "systemic racism" and how "innocent black and brown people have been harmed for hundreds of years" because of their skin color.Andy Mark Miller
The literature also describes the founding of the Black Lives Matter movement, describing it as a group started “after a 17-year-old African American boy named Trayvon Martin was shot and killed walking home from the store.”
The paragraph then explains that the women who created Black Lives Matter were “upset when the courts decided that the man who killed Trayvon was not guilty. This was not fair, and they wanted things to change.”
Another sheet explains that “systemic racism” happens because “most of the people who make the rules are usually not people of color.”News Education Black Lives Matter Wisconsin Race and Diversity George Floyd Racism