Polaroid Corp. announced on Thursday that it has filed for Chapter 11 bankruptcy due to “apparent fraud acts” at its parent company, Petters Group Worldwide.
Polaroid, a consumer-electronics company that boasts it invented instant photography, said the restructuring process will not affect day-to-day operations, and said it has enough cash reserves to finance the reorganization, so it doesn’t expect to seek addition debtor-in-possession financing.
Polaroid said in its press release that “the founder of Petters Group and certain associates are currently under investigation for alleged acts of fraud that have compromised the financial condition of Polaroid and other entities owned by Petters Group,” noting that “Polaroid and its leadership team are not subjects of the ongoing investigation involving Petters Group.”
Petters Group founder Tom Petters stands accused by federal prosecutors of leading a $2 billion-plus fraud.
“We expect to continue our operations as normal during the reorganization and are planning for new product launches in 2009,” Polaroid CEO Mary Jeffries was quoted as saying in the press release.
Polaroid said it will continue to market and ship its products, and will continue to honor all warranties.
Jeffries said in the release that “Our operations are strong and during this process Polaroid will ship products to our retail partners, work with our suppliers and contract manufacturers to fulfill retailer demand, honor customer warranties and employees are expected to receive their regular paychecks without interruption.”
This is the second time in recent years that Polaroid has sought bankruptcy protection -- it also happened in 2001.
Petters Group has owned Polaroid since 2005. Also, an affiliated company, Petters Companies Inc., has financial ties to Polaroid through Petters Group Worldwide.
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