Monday, 30 May 2016
Last updated 2 days ago
Apr 6 2009 | 2:03am ET
A trio of hedge funds that has been battling Polaroid Corp. has lost its bid to buy the bankrupt company.
Ritchie Capital Management, Acorn Capital Group and Lancelot Investors Fund had sought to buy the company, best know for its instant cameras, after they invested hundreds of millions of dollars with Polaroid’s owner, Petters Group Worldwide. Petters Group founder Thomas Petters was arrested last year and charged with running a $3 billion Ponzi scheme.
But Polaroid was sold at auction Friday to New York-based private equity firm Patriarch Partners for $59.1 million. That bid still must be approved by a federal judge at a hearing scheduled for today.
Patriarch also beat out Luxembourg-based Genii Capital, whose $42 million bid for Polaroid infuriated Ritchie, Acorn and Lancelot. The hedge funds, leading a creditors committee, claimed that the bid was too low and would violate liens they held against Polaroid’s trademark rights.
Those liens are at the center of a nasty dispute between the hedge funds and the bankruptcy trustee running Polaroid. In February, Polaroid sued Ritchie and Acorn, accusing them of assisting Petter’s alleged fraud. Last month, Ritchie sued back, calling Polaroid’s claims “outrageous.”
While the hedge funds acknowledge that “Patriarch brought considerable value to the estate and that certain aspects of the Patriarch bid are advantageous,” they argued that a $61.5 million offer from Hilco Merchant Resources and Gordon Brothers Group should have been accepted. In a court filing, the creditors committee called on Patriarch to “submit additional bids to arrive at the truly highest and best offer for the debtors’ assets.”