Eastman Kodak Co
Advisers to Kodak are also lining up a stalking horse that would become the lead bidder for a patent portfolio should it be auctioned via the Chapter 11 process, the newswire said, citing one of the people.
Neither Kodak nor Citigroup immediately responded to requests for comment.
Shares of Kodak fell 7.2 cents to 60 cents in after-hours trading following the report. They had closed regular trading down 14.3 cents, or 17.5 percent, at 67.2 cents.
Kodak has been left behind by rivals that embraced digital camera technology faster.
The Rochester, New York-based company is trying to raise cash by selling a large patent portfolio, a sale that could enable it to avoid bankruptcy.
It also has patent litigation against such companies as Apple Inc
On Tuesday, Kodak restructured its business operations, but it was unclear whether this would be enough to restore the company's health sufficiently fast.
According to published reports, Kodak may file for Chapter 11 protection by early February, and seek about $1 billion (651 million pounds) of debtor-in-possession financing to keep it operating while in bankruptcy.
The company is scheduled to report fourth-quarter results on January 26.
(Reporting by Jonathan Stempel in New York; Editing by Richard Chang)