Hollywood developer CIM Group LP finds itself in an unexpected predicament.

The theater at its Hollywood & Highland Center has spent the last decade as the home of the Oscars ceremony and crowned by the name of its sponsor, Eastman Kodak Co. But suddenly, it could no longer have either.

News last week that Kodak is preparing for bankruptcy and that the Academy of Motion Picture Arts and Sciences is threatening to move the Oscars to another venue leave questions about the future of one of Hollywood’s most iconic modern landmarks.

If CIM finds itself without the Oscars or if Kodak goes bankrupt, it could be difficult for the company to secure lucrative new naming rights for the theater.

“The Academy Awards are the parade of America’s royalty,” said John Tronson, a Hollywood real estate broker at Avison Young and former president of the Hollywood Chamber of Commerce. “The (value of) naming rights would be matchable or achievable again if the Academy stays, but if the Academy leaves, absolutely not.”

Kodak, the Rochester, N.Y., camera company, agreed to pay $75 million over some 20 years to see its name above the 3,400-plus-seat theater a decade ago. But as its core 35 mm film business has withered and its digital cameras have failed to catch on, it has had trouble servicing its $1.45 billion debt load.

Meanwhile, the Academy has indicated that it plans to exercise a clause in its lease agreement that would allow it to move the Oscars from the theater after the 2013 show, according to an article in the Hollywood Reporter last week. Some speculate that the Academy is using Kodak’s financial troubles as leverage to negotiate a better deal.

The Academy pays a couple of hundred thousand dollars, with a small annual increase, for use of the Kodak Theatre, and it may be trying to renegotiate its lease with CIM or get some upgrades to the venue itself, sources said.

Michael Homeier, an attorney at Sherman Oaks law firm Homeier & Law P.C., said if Kodak were to liquidate, it would almost certainly not continue to pay its nearly $4 million annual naming-rights fee. However, if it reorganizes, it may continue to see marketing value in the agreement.

“That uncertainty may be why (the Academy) made the announcement that they are considering moving,” he said.

The Academy hasn’t said what other theaters it’s considering, but candidates could include downtown’s Nokia Theatre or Dorothy Chandler Pavilion.

Rocky road

The Hollywood theater was custom built for the Academy by Trizec Properties Inc., which developed the $615 million Hollywood & Highland Center more than a decade ago. The Academy signed a 20-year contract at the theater that included an option to leave after 10 years, according to sources familiar with the deal.

Around the same time, Kodak signed on for naming rights to the theater at the urging of the Academy. Its contract, however, does not have an option to opt out of the deal after a certain number of years, sources said.

Given both long-term contracts were already in place, CIM didn’t anticipate having to deal with the possibility of losing both at once when it bought the complex for $201 million from Trizec in 2004. But should Kodak dissolve, who would take over branding the Hollywood theater?

Last decade, American Express Co. and United Airlines were considered possible sponsors, according to Carl Schloessman, senior vice president of marketing at Live Nation Entertainment Inc., who was involved in the original marketing team for the theater.

Today, a company looking to get its name in front of millions of tourists from around the world at the popular Hollywood corner may consider making a deal.

However, CIM is not at a complete disadvantage. Unlike in the late 1990s before the neighborhood had experienced its renaissance – which was jump-started by Hollywood & Highland – today’s Hollywood has become a popular destination for tourists and locals alike, with posh hotels like the W Hotel and luxury residences like the 1600 Vine.

And neither is CIM likely to be too worried financially about the departure of Kodak or the Academy. It has secured the Montreal circus theater group Cirque du Soleil for year-round performances, bringing in thousands of people for each show.

“The Academy Awards is of very little benefit aside from perception for that project,” said Tronson. “And the loss of $4 million (from Kodak’s naming-rights payments) on a project that size is insignificant, believe it or not. CIM has $9.5 billon worth of real estate. They aren’t going to like it, but it’s not going to hurt them.”