Sovereign: Polaroid Assets Undervalued

NEW YORK (Reuters) – Sovereign Bancorp told a U.S. bankruptcy court this week that trademarks of camera maker Polaroid were significantly undervalued in a deal to sell its assets, including its brand name, to an affiliate of Luxembourg-based private equity firm Genii Capital.

Sovereign Bancorp said in a court filing on Monday that the mid-range value of the Polaroid trademarks is about $300 million.

In January, Genii, through an affiliate named PHC Acquisitions, offered to buy the company for $42 million plus the assumption of certain liabilities. Polaroid has sought to name PHC as the “stalking horse” or lead bidder at a bankruptcy auction to be held in March.

Sovereign said in court papers that it objects “to what appears to be substantially inadequate consideration for the Polaroid Trademarks, which it believes have a value far in excess of the Proposed Purchase Price.”

Acorn Capital, a secured creditor of Polaroid Corp owed $273 million, had borrowed funds from Sovereign and is in default on that loan, the bank said in court documents.

Sovereign said it was an interested party in the proceedings, as it was seeking to recover money on that loan.

The Wall Street Journal reported earlier this week that private investor group Hilco Consumer Capital, a division of the liquidation company that invests in consumer brand names and trademarks, was interested in the Polaroid trademarks and brand name. A Hilco spokesman declined to comment on the group’s interest in Polaroid.

An attorney for Polaroid was not immediately available for comment.

The case is In re: Polaroid Corp, U.S. Bankruptcy Court, District of Minnesota, No. 08-46617. (Reporting by Emily Chasan and Santosh Nadgir in Bangalore; editing by Richard Chang)