Polaroid selects $42 million stalking horse bid for intellectual property assets

By Caroline Salls

Pittsburgh, Jan. 29 - Polaroid Holding Co. has entered into a stalking horse asset purchase agreement with Genii Capital, SA affiliate PHC Acquisitions, LLC, according to a company news release.

Under the proposed purchase agreement, PHC Acquisitions would acquire some of the company's assets including all of Polaroid's intellectual property rights and the Polaroid name and brand, for $42 million in cash, plus the assumption of specified liabilities.

According to the release, Genii Capital is a shareholder in Zink Imaging Inc., inventor and manufacturer of ZINK Paper and the Zero Ink Printing Technology, which is used in a Polaroid instant mobile printer and instant digital camera.

Mary L. Jeffries, Polaroid's chief executive officer, said entering into the asset purchase agreement marks progress in Polaroid's financial restructuring and provides a key milestone on the path out of bankruptcy protection.

"Genii Capital's interest in Polaroid affirms the viability of the company and the brand," Jeffries said in the release.

"Polaroid is going to emerge a sustainable business where people are employed and vendors and customers will have an opportunity to continue to do business with Polaroid."

The sale closing is subject to higher offers at auction, bankruptcy court approval and customary closing conditions.

According to the bid procedures motion filed Wednesday with the U.S. Bankruptcy Court for the District of Minnesota, PHC Acquisitions has paid a $4.2 million deposit toward the purchase price.

If PHC Acquisitions is not the high bidder at auction, Polaroid will pay it a $1.2 million break-up fee and reimburse up to $500,000 of its sale-related expenses.

Competing bids must be submitted by 6 p.m. ET on March 12 and must include a 10% deposit. Competing bids must be at least equal to the amount of the stalking horse bid, break-up fee and expense reimbursement, plus $300,000.

Subsequent bids at auction must be made in minimum increments of $250,000.

A hearing on the bid procedures is scheduled for Feb. 18.

Polaroid, a Minnetonka, Minn., instant and digital imaging company, filed for bankruptcy on Dec. 18. Its Chapter 11 case number is 08-46617.

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