Hedge Fund Barred From Suing Petters-Owned Co.

Dec 16 2008 | 3:55am ET

Acorn Capital Group’s bid to pursue a lawsuit against Polaroid Corp. has been turned down by a Minneapolis judge.

U.S. District Judge Ann Montgomery denied the request by the Greenwich, Conn.-based hedge fund and two other companies. Lawsuits against Polaroid, one of the many companies caught up in the Tom Petters fraud case, have been frozen while court-appointed receivers have sought to sift through the dozens of companies owned or controlled by Petters, a Minnesota businessman and hedge fund manager who has been charged with running a $3.5 billion Ponzi scheme.

The judge said it is too early to lift the temporary hold, and that she didn’t believe Acorn would be significantly harmed if it wasn’t allowed to proceed immediately with its lawsuit.

Acorn says that $25 million of the $300 million it lent Petters went to Polaroid, secured by its inventory and receivables.

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