Mr. James V. Continenza, Executive Chairman, Eastman Kodak Company (August 4, 2020)
Summary
A letter dated August 4, 2020 to James V. Continenza, Executive Chairman of Eastman Kodak Company, from Chairman James E. Clyburn of the Select Subcommittee on the Coronavirus Crisis, Chairwoman Carolyn B. Maloney of the Committee on Oversight and Reform and Chairwoman Maxine Waters of the Committee on Financial Services. The letter requests documents and information about a $765 million loan designated for Kodak to support production of active pharmaceutical ingredients, and about trading activity by company executives before the arrangement was publicly announced. It refers to stock options awarded on May 20, 2020 and July 27, 2020. It asks for documents covering January 1, 2020, to the present, and a staff briefing, by August 18, 2020. An enclosure gives response instructions.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
- Date
- 2020-08-04
Cite this document
“Mr. James V. Continenza, Executive Chairman, Eastman Kodak Company (August 4, 2020).”
Dated 2020-08-04. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2020-08-04-clyburn-cbm-waters-to-kodak-re-loan-1-f282aff0b096-767bd142c2/
, SHA-256 f282aff0b096d9d74b2b649121abd7e89d452de78461b92b6f57d591af1297f3.Full text
August 4, 2020
Mr. James V. Continenza
Executive Chairman
Eastman Kodak Company
343 State Street
Rochester, NY 14650
Dear Mr. Continenza:
Our Committees are reviewing the federal government’s efforts to procure critical
supplies needed to address the coronavirus pandemic. We are writing to request documents and
information regarding a $765 million loan designated for Eastman Kodak Company (Kodak) to
support the production of active pharmaceutical ingredients for generic drugs, as well as trading
activity by company executives before this arrangement was publicly announced.
On July 28, 2020, the U.S. International Development Finance Corporation (DFC)
announced that Kodak will be awarded a $765 million federal loan to support the production of
pharmaceutical ingredients through a new Kodak subsidiary, Kodak Pharmaceuticals. 1 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 of 1950 in
connection with the coronavirus pandemic. 2 Although Kodak has experience manufacturing
chemicals used in photography, it has not traditionally manufactured chemicals for use in
pharmaceutical products. 3
Kodak executives, including you, acquired significant amounts of Kodak shares and
options in the months prior to the loan announcement. 4 You said in an interview with CNBC
1
U.S. International Development Finance Corporation, DFC to Sign Letter of Interest for Investment in
Kodak’s Expansion into Pharmaceuticals (July 28, 2020) (online at www.dfc.gov/media/press-releases/dfc-sign-
letter-interest-investment-kodaks-expansion-pharmaceuticals).
2
The White House, EO on Delegating Authority Under the DPA to the CEO of the U.S. International
Development Finance Corporation to Respond to the COVID-19 Outbreak (May 14, 2020) (online at
www.whitehouse.gov/presidential-actions/eo-delegating-authority-dpa-ceo-u-s-international-development-finance-
corporation-respond-covid-19-outbreak/).
3
Kodak to Produce Pharmaceutical Ingredients with U.S. Government Loan, Washington Post (July 28,
2020) (online at www.washingtonpost.com/business/2020/07/28/kodak-produce-pharmaceutical-ingredients/);
Kodak’s Shift to Pharmaceuticals Comes Years After Rival Fujifilm Made the Same Pivot, Fortune (July 29, 2020)
(online at fortune.com/2020/07/29/kodak-pharmaceuticals-loan-stock-fujifilm/).
4
Kodak C.E.O. Got Stock Options Day Before News of Loan Sent Stock Soaring, New York Times (July
31, 2020) (online at www.nytimes.com/2020/07/31/business/kodak-ceo-stock-options.html); A Closer Look at the
Kodak Chairman’s Stock Purchases as Shares Rally 1,500%, Benzinga (July 29, 2020) (online at
Mr. James Continenza
Page 2
that the company had been working on the loan deal for a “few months” before the July 28
announcement and began holding initial high-level talks regarding the loan two months prior to
the announcement. You explained that the public was not made aware of the loan during this
period, saying “this has been a pretty tight kept secret even until the last day.” 5
According to one report:
Filings with the Securit[ies] and Exchange Commission show that on June 23 Continenza
purchased roughly 46,700 additional shares. On the same date, board member Philippe
Katz purchased 5,000 shares. 6
Your June 23 stock purchase reportedly increased in value from nearly $104,000 to more than
$1.5 million at one point following the July 28 loan announcement. 7
During the period when Kodak was reportedly engaged in confidential negotiations for
the loan award, the company also awarded stock options to you and members of Kodak’s board
of directors that are now worth millions of dollars. On May 20, the company awarded 240,000
stock options to board members, which were reportedly worth approximately $4 million as of
July 31.8
On July 27, the day before news of the loan became public, the company’s board of
directors awarded you 1.75 million stock options. According to one report, these options were
granted as part of an “understanding” with the board that had not been previously been made
public or included in your employment contract. Following a nearly 1,500 percent increase in
Kodak stock value last week, your holdings reportedly gained about $83 million in value in less
than two days, with roughly $30 million of that value from gains on the options granted on July
27. 9
Companies and individuals that receive federal funds in response to the coronavirus crisis
must follow the law and not engage in abusive practices. DFC’s decision to award this loan to
Kodak despite your company’s lack of pharmaceutical experience and the windfall gained by
www.benzinga.com/news/20/07/16833683/a-closer-look-at-the-kodak-chairmans-stock-purchases-as-shares-rally-1-
500).
5
Kodak Executive Chairman Addresses Jump in Trading Activity Before Government Deal Was
Announced, CNBC (July 29, 2020) (online at www.cnbc.com/2020/07/29/kodak-executive-chairman-addresses-
jump-in-trading-activity-before-government-deal-was-announced.html).
6
Id.
7
A Closer Look at the Kodak Chairman’s Stock Purchases as Shares Rally 1,500%, Benzinga (July 29,
2020) (online at www.benzinga.com/news/20/07/16833683/a-closer-look-at-the-kodak-chairmans-stock-purchases-
as-shares-rally-1-500).
8
Kodak C.E.O. Got Stock Options Day Before News of Loan Sent Stock Soaring, New York Times (July
31, 2020) (online at www.nytimes.com/2020/07/31/business/kodak-ceo-stock-options.html).
9
Eastman Kodak’s Top Executive Reportedly Got Trump Deal Windfall on an ‘Understanding’, CNBC
(Aug. 3, 2020) (online at www.cnbc.com/2020/08/01/eastman-kodaks-top-executive-reportedly-got-trump-deal-
windfall-on-an-understanding.html).
Mr. James Continenza
Page 3
you and other company executives as a result of this loan raise questions that must be thoroughly
examined.
For all these reasons, we request the following documents and information by August 18,
2020, covering the period from January 1, 2020, to the present:
1. All documents and communications related to DFC’s loan to Kodak, including
but not limited to documents and communications regarding:
a. your company’s interest in obtaining a loan or entering into any agreement
with the federal government to manufacture pharmaceutical ingredients;
b. discussions or negotiations with DFC, the Department of Defense (DoD),
the White House, or any other federal agency;
c. your company’s ability to manufacture or procure pharmaceutical
ingredients;
d. any solicitation or request for proposals;
e. any offer, bid, or proposal from your company;
f. any possible commitment made by any pharmaceutical company to
purchase active pharmaceutical ingredients from Kodak;
g. all loan documents;
h. any performance contracts associated with the loan; and
i. any agreements with subcontractors, vendors, or other third-party sellers
and manufacturers.
2. All documents and communications related to the issuance of Kodak stock,
options, or other securities to any Kodak officer or director, including but not
limited to the award of options to members of Kodak’s board of directors on May
20, 2020 and to you on July 27, 2020.
3. All documents and communications related to the purchase or exercise of Kodak
stock, options, or other securities by any Kodak officer or director, including but
not limited to the share purchases by you and Mr. Katz on June 23, 2020.
4. A list of all meetings or phone conferences with any federal employee, official,
agent, representative, or volunteer, including but not limited to any White House,
DOD, or DFC employee, regarding the topics described in this letter. Please
include the date and time of the meeting or phone conference, names of all
participants, and a brief description of the topics discussed.
In addition, we respectfully request a staff briefing by August 18, 2020, to address these
issues.
An attachment to this letter provides additional instructions for responding to this request.
If you have any questions regarding this request, please contact staff for the Select Subcommittee
on the Coronavirus Crisis at (202) 225-4400.
Mr. James Continenza
Page 4
Sincerely,
__________________________ __________________________
James E. Clyburn Carolyn B. Maloney
Chairman Chairwoman
Select Subcommittee on the Coronavirus Committee on Oversight and Reform
Crisis
__________________________
Maxine Waters
Chairwoman
Committee on Financial Services
Enclosure
cc: The Honorable Steve Scalise, Ranking Member
Select Subcommittee on the Coronavirus Crisis
The Honorable James R. Comer, Ranking Member
Committee on Oversight and Reform
The Honorable Patrick McHenry, Ranking Member
Committee on Financial Services
Responding to Oversight Committee Document Requests
1. In complying with this request, produce all responsive documents that are in your
possession, custody, or control, whether held by you or your past or present agents,
employees, and representatives acting on your behalf. Produce all documents that you
have a legal right to obtain, that you have a right to copy, or to which you have access, as
well as documents that you have placed in the temporary possession, custody, or control
of any third party.
2. Requested documents, and all documents reasonably related to the requested documents,
should not be destroyed, altered, removed, transferred, or otherwise made inaccessible to
the Committee.
3. In the event that any entity, organization, or individual denoted in this request is or has
been known by any name other than that herein denoted, the request shall be read also to
include that alternative identification.
4. The Committee’s preference is to receive documents in electronic form (i.e., CD,
memory stick, thumb drive, or secure file transfer) in lieu of paper productions.
5. Documents produced in electronic format should be organized, identified, and indexed
electronically.
6. Electronic document productions should be prepared according to the following
standards:
a. The production should consist of single page Tagged Image File (“TIF”), files
accompanied by a Concordance-format load file, an Opticon reference file, and a
file defining the fields and character lengths of the load file.
b. Document numbers in the load file should match document Bates numbers and
TIF file names.
c. If the production is completed through a series of multiple partial productions,
field names and file order in all load files should match.
d. All electronic documents produced to the Committee should include the following
fields of metadata specific to each document, and no modifications should be
made to the original metadata:
BEGDOC, ENDDOC, TEXT, BEGATTACH, ENDATTACH, PAGECOUNT,
CUSTODIAN, RECORDTYPE, DATE, TIME, SENTDATE, SENTTIME,
BEGINDATE, BEGINTIME, ENDDATE, ENDTIME, AUTHOR, FROM, CC,
TO, BCC, SUBJECT, TITLE, FILENAME, FILEEXT, FILESIZE,
DATECREATED, TIMECREATED, DATELASTMOD, TIMELASTMOD,
INTMSGID, INTMSGHEADER, NATIVELINK, INTFILPATH, EXCEPTION,
BEGATTACH.
7. Documents produced to the Committee should include an index describing the contents
of the production. To the extent more than one CD, hard drive, memory stick, thumb
drive, zip file, box, or folder is produced, each should contain an index describing its
contents.
8. Documents produced in response to this request shall be produced together with copies of
file labels, dividers, or identifying markers with which they were associated when the
request was served.
9. When you produce documents, you should identify the paragraph(s) or request(s) in the
Committee’s letter to which the documents respond.
10. The fact that any other person or entity also possesses non-identical or identical copies of
the same documents shall not be a basis to withhold any information.
11. The pendency of or potential for litigation shall not be a basis to withhold any
information.
12. In accordance with 5 U.S.C.§ 552(d), the Freedom of Information Act (FOIA) and any
statutory exemptions to FOIA shall not be a basis for withholding any information.
13. Pursuant to 5 U.S.C. § 552a(b)(9), the Privacy Act shall not be a basis for withholding
information.
14. If compliance with the request cannot be made in full by the specified return date,
compliance shall be made to the extent possible by that date. An explanation of why full
compliance is not possible shall be provided along with any partial production.
15. In the event that a document is withheld on the basis of privilege, provide a privilege log
containing the following information concerning any such document: (a) every privilege
asserted; (b) the type of document; (c) the general subject matter; (d) the date, author,
addressee, and any other recipient(s); (e) the relationship of the author and addressee to
each other; and (f) the basis for the privilege(s) asserted.
16. If any document responsive to this request was, but no longer is, in your possession,
custody, or control, identify the document (by date, author, subject, and recipients), and
explain the circumstances under which the document ceased to be in your possession,
custody, or control.
17. If a date or other descriptive detail set forth in this request referring to a document is
inaccurate, but the actual date or other descriptive detail is known to you or is otherwise
apparent from the context of the request, produce all documents that would be responsive
as if the date or other descriptive detail were correct.
2
18. This request is continuing in nature and applies to any newly-discovered information.
Any record, document, compilation of data, or information not produced because it has
not been located or discovered by the return date shall be produced immediately upon
subsequent location or discovery.
19. All documents shall be Bates-stamped sequentially and produced sequentially.
20. Two sets of each production shall be delivered, one set to the Majority Staff and one set
to the Minority Staff. When documents are produced to the Committee, production sets
shall be delivered to the Majority Staff in Room 2157 of the Rayburn House Office
Building and the Minority Staff in Room 2105 of the Rayburn House Office Building.
21. Upon completion of the production, submit a written certification, signed by you or your
counsel, stating that: (1) a diligent search has been completed of all documents in your
possession, custody, or control that reasonably could contain responsive documents; and
(2) all documents located during the search that are responsive have been produced to the
Committee.
Definitions
1. The term “document” means any written, recorded, or graphic matter of any nature
whatsoever, regardless of how recorded, and whether original or copy, including, but not
limited to, the following: memoranda, reports, expense reports, books, manuals,
instructions, financial reports, data, working papers, records, notes, letters, notices,
confirmations, telegrams, receipts, appraisals, pamphlets, magazines, newspapers,
prospectuses, communications, electronic mail (email), contracts, cables, notations of any
type of conversation, telephone call, meeting or other inter-office or intra-office
communication, bulletins, printed matter, computer printouts, teletypes, invoices,
transcripts, diaries, analyses, returns, summaries, minutes, bills, accounts, estimates,
projections, comparisons, messages, correspondence, press releases, circulars, financial
statements, reviews, opinions, offers, studies and investigations, questionnaires and
surveys, and work sheets (and all drafts, preliminary versions, alterations, modifications,
revisions, changes, and amendments of any of the foregoing, as well as any attachments
or appendices thereto), and graphic or oral records or representations of any kind
(including without limitation, photographs, charts, graphs, microfiche, microfilm,
videotape, recordings and motion pictures), and electronic, mechanical, and electric
records or representations of any kind (including, without limitation, tapes, cassettes,
disks, and recordings) and other written, printed, typed, or other graphic or recorded
matter of any kind or nature, however produced or reproduced, and whether preserved in
writing, film, tape, disk, videotape, or otherwise. A document bearing any notation not a
part of the original text is to be considered a separate document. A draft or non-identical
copy is a separate document within the meaning of this term.
2. The term “communication” means each manner or means of disclosure or exchange of
information, regardless of means utilized, whether oral, electronic, by document or
otherwise, and whether in a meeting, by telephone, facsimile, mail, releases, electronic
3
message including email (desktop or mobile device), text message, instant message,
MMS or SMS message, message application, or otherwise.
3. The terms “and” and “or” shall be construed broadly and either conjunctively or
disjunctively to bring within the scope of this request any information that might
otherwise be construed to be outside its scope. The singular includes plural number, and
vice versa. The masculine includes the feminine and neutral genders.
4. The term “including” shall be construed broadly to mean “including, but not limited to.”
5. The term “Company” means the named legal entity as well as any units, firms,
partnerships, associations, corporations, limited liability companies, trusts, subsidiaries,
affiliates, divisions, departments, branches, joint ventures, proprietorships, syndicates, or
other legal, business or government entities over which the named legal entity exercises
control or in which the named entity has any ownership whatsoever.
6. The term “identify,” when used in a question about individuals, means to provide the
following information: (a) the individual’s complete name and title; (b) the
individual’s business or personal address and phone number; and (c) any and all
known aliases.
7. The term “related to” or “referring or relating to,” with respect to any given subject,
means anything that constitutes, contains, embodies, reflects, identifies, states, refers to,
deals with, or is pertinent to that subject in any manner whatsoever.
8. The term “employee” means any past or present agent, borrowed employee, casual
employee, consultant, contractor, de facto employee, detailee, fellow, independent
contractor, intern, joint adventurer, loaned employee, officer, part-time employee,
permanent employee, provisional employee, special government employee,
subcontractor, or any other type of service provider.
9. The term “individual” means all natural persons and all persons or entities acting on
their behalf.
4
File and source
- File
- 2020-08-04-clyburn-cbm-waters-to-kodak-re-loan-1-f282aff0b096.pdf
- Size
- 308,524 bytes
- SHA-256
- f282aff0b096d9d74b2b649121abd7e89d452de78461b92b6f57d591af1297f3
- Original
- No public link identified.