Monday, Apr. 03, 1978

Kodak Clouted

A big award for Berkey

The business and legal communities were astonished in January when a federal jury of two men and eight women found Eastman Kodak Co. guilty of monopolistic practices in a case brought by New York-based Berkey Photo, Inc., a relatively small competitor. When the same jury last week fixed the penalty, the reaction was genuine shock. Kodak, said the jurors, should pay Berkey $37.6 million in damages--and that was just the beginning. Because standard procedure is to triple damages for violation of antitrust law, the court is expected to raise the award to $112.8 million, one of the largest judgments ever against a U.S. corporation.

Had the amount been paid last year, it would have taken a bite out of Kodak's profits of $643.4 million, which it earned on sales of nearly $6 billion. Kodak will doubtless avoid paying anything for years, while it carries appeals to higher courts. But the legal battle stands to cloud the future of a company that has suffered some reverses lately. Kodak has been less than victorious in its battle with Polaroid in the instant-camera market, and Kodak's stock has plunged from a 1973 high of 151 3/4 to last week's 42 1/8. What is more, Berkey's is not the only suit Kodak is contesting. Others have been filed by Pavelle, a tiny New Jersey firm that went bankrupt in 1975, and by GAF. There also is evidence that the Justice Department may be preparing an antitrust suit against the company.

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