Less than two weeks after filing for commercial bankruptcy, Eastman Kodak Co. has been hit with at least one lawsuit from a Kodak employee. If the speculation by bankruptcy attorneys is accurate, it will likely not be the last suit to be filed against the company by current or former employees or other company shareholders.

Kodak filed for Chapter 11 bankruptcy after several years of falling profits and declining stock prices. Currently, Kodak stock is selling for 35 cents per share, down from more than $30 per share a decade ago. The plaintiff in the lawsuit, a current Kodak employee, alleges that the company and its executives failed to safeguard workers' 401(k) retirement plans as stock prices fell.

Under Kodak's retirement plan, employees may invest in a stock fund or purchase company stock, among other options. In the lawsuit, the plaintiff seeks class action status on behalf of other Kodak employees who took similar hits to their 401(k) retirement plans.

The plaintiff blames the loss on company executives, stating that "a prudent fiduciary facing similar circumstances would not have stood idly by as [the retirement plans] lost tens of millions of dollars." It asks the court to order company executives to personally make up the losses that resulted from employee investments in Kodak stock.

Kodak says that the suit has no merit, and many bankruptcy attorneys agree. "In almost every Chapter 11 case there is anger toward management," says one attorney. "That is because management is seen as the reason that the bankruptcy occurred."

What do you think? Should the Kodak executives have to reimburse their employees for retirement losses? Or should the employees have anticipated the losses and adjusted their retirement plans accordingly?

Source: Democrat and Chronicle, "Lawsuit takes aim at Kodak," Matthew Daneman, Jan. 31, 2012