Polaroid files for bankruptcy amid investigation into parent company
Polaroid announced today that an ongoing investigation into its parent company, Petters Group Worldwide, has “compromised the financial condition” of the camera and electronics company, and so it would begin Chapter 11 bankruptcy proceedings.
It is the second time the company has filed for bankruptcy since the Oct. 3 arrest of Thomas Petters on federal charges of mail fraud, wire fraud, money laundering and obstruction of justice. His company, Petters Group Worldwide, purchased Polaroid, Inc. in 2005.
According to FBI charging papers, federal officials believe Thomas Petters created “fictitious documents” showing that his companies were “buying and selling substantial goods and merchandise,” and then used those documents to secure the trust–and money–of investors who were in fact buying a stake in non-existent holdings.
Polaroid had its assets frozen soon after Petters’ arrest, and the company subsequently filed for bankruptcy. Though Polaroid continues to remain profitable through the sale of televisions, DVD players, cameras and digital photo frames, the investigation drove it to this second filing.
In a statement released today, the company asserted that though the investigation has hampered its business operations, it will not shut down. It also stated that neither Polaroid as a whole nor any members of its leadership staff are a part of the investigation.
“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,” Mary L. Jeffries, Polaroid chief executive officer, said in the statement. “We expect to continue our operations as normal during the reorganization and are planning for new product launches in 2009.”
Polaroid, which introduced immediate film-developing technology that provided the most effective instant photo feedback until the advent of the digital camera, acknowledged that “there may be a short interruption in parts shipments and service,” but that “it will be minimal and Polaroid will work diligently to expedite.”
Click here to read Polaroid’s statement on the bankruptcy filing.
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