Esopus Questions Kodak Auction

A hedge fund has thrown into question a key part of Eastman Kodak's bankruptcy plan.

Esopus Creek Advisors complained to U.S. bankruptcy trustee Tracy Hope Davis that it is "concerned as to the integrity of the bidding process" for Kodak's sale of its digital-imaging patents. The hedge fund's letter was prompted by an article last week in The Wall Street Journal which suggests that the two leading bidders, Apple Inc. and Google Inc., may by colluding, and it told Davis, "we note that the trustee is entitled to avoid any sale resulting from collusive bidding."

Esopus, whose Value Series Fund owns 9.75% of Kodak's senior secured note, fears that the "unusually secretive" process could be hurting Kodak's creditors.