Kodak suing the Kruchtens over stock options

Eastman Kodak Co. is suing two former high-level Kodak executives for not returning more than $500,000 in stock gains received from the sale of stock options the company says they erroneously received, according to the Rochester Business Journal. Kodak filed separate complaints in the state Supreme Court in Rochester against Brad and Dolores Kruchten.

Brad Kruchten left Kodak in April, 2018, as a senior vice president and at one time was president of the company’s Film, Photofinishing and Entertainment Group, reporting to Antonio M. Perez, Kodak’s Chairman and CEO. Dolores Kruchten left the company in 2018 as president of Eastman Business Park and corporate real estate; she worked at Kodak from June 8, 1981, until Sept. 4, 2013, and then again from Aug. 24, 2015, until Nov. 6, 2018. They currently operate Kruchten Properties in Pittsford.

The dispute arises from an incentive program that offered the executives the opportunity to purchase stock options at a “strike price.” Eastman Kodak used Computershare to provide services for employees participating in the stock option program. Computershare was the intermediary between the employee and the broker. According to the Rochester Business Journal, the broker would purchase the shares of Kodak stock at the strike price, sell the shares at the market price, and return the proceeds to Computershare. Computershare then would deduct taxes and fees and send the proceeds to the participant.

When the Kruchten contacted Computershare on separate occasions to sell shares, Computershare erroneously showed they had more options available than they actually had, according to the lawsuits. As a result, in July 2020, Brad Kruchten erroneously received $358,023.82 to which he was not entitled and Dolores Kruchten received $270,476.35 in proceeds to which she was not entitled, according to the suit. Kodak has asked the Kruchtens to return the funds, but they have refused, according to the complaint.