Polaroid Seeks Better Bid From Hilco/Gordon Bros.

Bankrupt instant camera company Polaroid Corp. has sought court approval for a sale to a joint venture between two liquidators, which betters a competing bid from Patriarch Partners LLC, according to a Bloomberg News report Thursday, April 9. The Minnetonka, Minn.-based company in a filing with the U.S. Bankruptcy Court for the District of Minnesota in Minneapolis asked for court approval on a bid from a JV between liquidation firms Hilco Consumer Capital LP of Toronto and Boston's Gordon Brothers Brands LLC, which values its assets at $72.6 million, Bloomberg News said.

Days earlier, Judge Gregory Kishel tossed out a $59.1 million bid won March 31 by New York private equity firm Patriarch Partners LLC on creditor disagreements over the auction process and the winning bid price, and asked for new offers. The Hilco-Gordon bid breaks down to $40 million in cash plus a stake valued at $16.2 million in the restructured Polaroid, Bloomberg News reported, citing the Polaroid filing. Other assets not included in the proposed deal are valued at $16.4 million, valuing the company at $72.6 million total.

The Deal reported previously that the earlier Patriarch bid consisted of $44.85 million in cash and an equity component of nonvoting stock in the restructured Polaroid worth nearly $7.8 million, or a stake of about 12%. That bid also excluded certain assets that were to be retained by the estate. Stalking-horse bidder PHC Acquisitions LLC, an affiliate of Luxembourg private equity firm Genii Capital, is entitled to a breakup fee of $1.2 million and $500,000 in reimbursement expenses, according to Polaroid.

Polaroid filed for bankruptcy Dec. 18, done in by problems surrounding its owner, Petters Group Worldwide LLC. Petters Group itself filed for bankruptcy on Oct. 11, little more than a week after chief executive Tom Petters was arrested on fraud charges and other allegations. Polaroid's bankruptcy is its second attempt at a restructuring. The company filed for Chapter 11 in October 2001. Attorneys from Lindquist & Vennum PLLP are counsel to Polaroid. Houlihan, Lokey, Howard & Zukin Inc. gave Polaroid financial advice. "