NEW YORK (Reuters) – Creditors objected on Friday to the results of the auction sale of bankrupt Polaroid Corp, won by private equity firm Patriarch Partners, saying a joint offer by two liquidation companies should have prevailed.
Earlier this week, Patriarch Partners won the auction with a bid valued at $59.1 million, including cash and a stake in the new company that would emerge from the Polaroid assets being bought.
Patriarch beat out rivals Ritchie Capital Management LLC, Luxembourg-based Genii Capital, and a joint venture between liquidation companies Hilco Consumer Capital and Gordon Brothers Group LLC.
A committee of Polaroid’s unsecured creditors has objected, asking the court to force Polaroid to accept the Hilco-Gordon joint venture’s $61.5 million bid, which included less cash but a larger stake in the new company, according to court documents filed in federal bankruptcy court Friday.
Patriarch’s acquisition of Polaroid’s assets, including most of the instant camera maker’s intellectual-property rights, is subject to approval by a judge at a hearing set for Monday in federal bankruptcy court.
Ritchie Capital filed a separate objection, saying Polaroid “did not properly allow or value equity offers from bidders, and improperly imposed a ‘cap’ on equity offers.”
A lawyer for Minnesota-based Polaroid did not immediately return a call for comment.
The creditors’ committee wants the court to allow bidding to continue “to arrive at the truly highest and best offer,” according to the documents.
Polaroid filed for Chapter 11 bankruptcy protection in December 2008.
Patriarch Partners LLC’s portfolio of companies includes Arizona Iced Tea brand and mapmaker Rand McNally.
The case is In re Polaroid Corp et al., U.S. Bankruptcy Court for the District of Minnesota No 08-46617. (Reporting by Phil Wahba; Editing by Gary Hill)