That doesn't preclude lawsuits. American business law is fucking stupid.
Also, people complain too much about lawsuits versus corporations. Wells Fargo just took a $1.6 billion charge for legal expenses. That's something like 700 person-years at $400/hr, 16 hrs/day. The stupidity isn't the system that allows the lawsuits, it's the corporate mindlessness that wastes the equivalent of 1,000 people's lifetimes on arguing that they didn't do anything wrong instead of just saying "welp you got us".
It's of course natural and sensible for companies to pursue strategies for new products and product lines as existing ones mature and decline. But if doing so means investing in new businesses where you have no particular expertise or advantage, it's unclear if you're benefiting your owners (i.e. shareholders) by doing so.
There's plenty to criticize Kodak about. But it was going to be in a very tough position no matter what. And we can name plenty of other businesses that have been completely replaced by new unrelated technologies. Keuffel and Esser wasn't going to become a calculator company.
Kodak was not a camera company as much as they were a chemical company. They made film, they made developing agents, glass, etc. Eastman Chemical was formerly a subsidary of Kodak, and they had even broader chemical expertise -- fibers, explosives, involved in the Manhattan Project, etc.
So transitioning to digital photography would have meant giving up almost all of their expertise and present business interests. It would have meant slashing their revenue and completely reinventing the company.
Of course, all of that happened anyway. But one can imagine how difficult it would be to pull that trigger yourself. Doing the long-term responsible thing might have even led to shareholder lawsuits...