Eastman Kodak, iconic photographic film pioneer, which invented the roll film way back in 1885, today filed for bankruptcy protection as the 131 year-old company was a decade late in making a transition to the digital age.

The Rochester, New York-based company that was founded by George Eastman in 1880, filed for protection under Chapter 11 in the US Bankruptcy Court for the Southern District of New York, a move that will allow it to reorganise its US operations by 2013.

Kodak, which introduced its $1 Brownie box type Camera more than a century ago, said in its bankruptcy petition, that it has assets worth $5.1 billion and debt of $6.75 billion.

Kodak's creditors include The Bank of New York Mellon, which is owed $668 million, Sony Studios, with $16.7 million, Warner Brothers, with $14.2 million, and Alcoa Inc., with $2.8 million.

Kodak has also obtained a $950 million, 18-month 'debtor-in possession financing'' from Citigroup to keep itself afloat during bankruptcy proceedings.

"The board of directors and the entire senior management team unanimously believe that this is a necessary step and the right thing to do for the future of Kodak," chairman and CEO, Antonio Perez said in a statement.

"Now we must complete the transformation by further addressing our cost structure and effectively monetising non-core intellectual-property assets. We look forward to working with our stakeholders to emerge a lean, world-class, digital imaging and materials science company," he added.

Kodak said it and its US subsidiaries has filed for Chapter 11 and its non-US subsidiaries were not covered by the filing and would continue to honour all obligations to their suppliers.

The decision to declare bankruptcy came after Kodak failed to find a buyer for its portfolio of digital imaging patents, but potential buyers stayed away fearing a sale may trigger a lawsuit from Kodak's creditors.

In July last year, Kodak had hired investment bank Lazard Ltd to look for buyers for its 1,100 digital patents, and warned in November that it might not survive 2012 if it was unable to raise $500 million in new debt.

Since 1999, Kodak has lost more than 95 per cent of its stock value as it was not able to cope with Japanese competition due to the onset of the digital revolution and was late to launch its mass-market line of digital cameras.

It is ironic that the company had to lose out to competition for digital cameras since it invented the first digital camera in 1975, but took the drastic step of shelving this innovation because it threatened its lucrative film business.

That costly blunder is more painful for the company that now generates 75 per cent of its revenues from digital business.

It has since poured millions of dollars into new lines of inkjet printers, which are now on the verge of turning a profit.

For years, Kodak has partly sustained itself by licensing its patents, which generated around $1.9 billion in the last three years, but revenues from this have been dwindling to just $27 million in the first half of 2011.

Kodak has a long history of digital innovation. In 1975, it invented the digital camera, and in 1976, Kodak invented the Bayer colour filter array, which allows digital cameras to capture images in colour.

Kodak, once ranked among America's corporate titans, saw its cash reserves falling to $862 million at the end of September from $1.4 billion a year earlier and recently reported a third quarter loss of $222 million, its ninth quarterly loss in three years.

Three members of the company's board of directors have resigned in the past four weeks with the latest being economist Laura Tyson, a member of the Clinton Administration and a former dean of the Walter Haas School of Business at the University of California, Berkeley.