On Tuesday, Eastman Kodak Co said that will seek approval from a court for the sale of the company's rights. The rights are valued at US$406 million. This will give creditors a big equity stake in Kodak after it sought Chapter 11 bankruptcy protection.

Creditors agreed to backstop an offering said Kodak, a New York based company. The firm was to issue 34 million common shares priced at US$11.94 per share piece. This is equal to around 85% of the equity of a reorganized company.

Kodak Chief Executive Officer, Antonio Perez said in a statement that the agreement allows the company to settle its obligations comprehensively with various key creditor constituencies.

In the third quarter of this year, Kodak stated hopes of emerging from Chapter 11.

The net proceeds from the sale of company rights would go to repay various creditors. It will also include repayment for second-lien creditors who would no longer get equity in the reorganized company.