Polaroid unsecured creditors committee files reorganization plan

By Caroline Salls

Pittsburgh, June 10 - Polaroid Corp.'s official committee of unsecured creditors has filed a plan of reorganization and related disclosure statement for the company's bankruptcy case, according to a Tuesday filing with the U.S. Bankruptcy Court for the District of Minnesota.

Under the plan, all of the assets of Polaroid's estate will be transferred to a liquidating trust, including the company's ownership interest in PLR IP Holdings, LLC, a joint venture with Hilco PLR Co., LLC and Gordon Brothers Brands, LLC.

The committee said the liquidating trustee will be responsible for liquidating specified assets, prosecuting causes of action, reconciling claims and distributing assets to Polaroid's creditors.

Treatment of creditors will include:

• Holders of secured claims will either be paid in full in cash, receive the collateral securing the claim or have their claims reinstated;

• Holders of administrative claims, priority tax claims and priority claims will be paid in full;

• Holders of general unsecured claims will receive a share of distributable cash after payment in full of priority claims and convenience class claims and reservation of amounts needed to satisfy post-confirmation expenses;

• The distribution for holders of Acorn/Ritchie claims will depend on the outcome of lawsuits. If the Acorn or Ritchie lawsuits are unsuccessful in avoiding asserted liens and disallowing, recharacterizing or equitably subordinating the Acorn and Ritchie claims, the claims will be allowed as secured claims.

If the lawsuits are successful in avoiding liens, but unsuccessful in disallowing, equitably subordinating or recharacterizing the claims, the claims will be treated as general unsecured claims.

If the lawsuits are completely successful, the claims will be disallowed and the Acorn and Ritchie creditors will receive no distribution; and

• Holders of debtor intercompany claims and interests will receive no distribution.

According to the disclosure statement, Acorn and Ritchie allege that they have a security interest in some of Polaroid's assets for credit extended to one or more of the Petters companies before the company filed for bankruptcy.

Polaroid disputes their claims and filed a fraudulent transfer lawsuit in February.

Polaroid, a Minnetonka, Minn., instant and digital imaging company, filed for bankruptcy on Dec. 18, 2008. Its Chapter 11 case number is 08-46617.

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