Bankruptcy judge declares Hilco, Gordon Brothers winning bidders for Polaroid
A tumultuous auction for Polaroid Corp. ended last Thursday with a St. Paul, Minn., bankruptcy judge declaring liquidators Hilco Consumer Capital of Toronto, Ontario, Canada, and Boston, Mass.-based Gordon Brothers Brands the winner with a bid of $85.9 million in cash and equity, reports the Star Tribune. The joint venture's bid was nearly a half million dollars lower than Patriarch Partners', but the judge deferred to creditors who urged him to approve the joint venture's bid as the best choice because of protections it offers them as minority shareholders.
It was the third round of bidding for the photo icon since the bidding began March 30, with each of the top two bidders winning once, only to have the auction reopened each time. Patriarch Partners, a New York private equity firm, technically won the auction in court with its high bid of $86.4 million, but it could not prevail as the "highest and best" bid without the judge's final approval, says the article.
Hilco and Gordon Brothers have purchased other distressed companies, including Linens 'N Things, Bombay Brands, and Sharper Image.Their bid was significantly higher than the original bid of $43.58 million in March.
Both bids included 25 percent equity in the new Polaroid, the maximum allowed in the auction, but differed primarily on the cash amount, the equity structure and the value of excluded assets, reports the Star Tribune. Patriarch's bid included Polaroid's large art collection with original works by Ansel Adams and Andy Warhol. The Hilco group's bid did not. The collection was given an estimated value of $6.5 million in the auction, but New York auction house Sotheby's actually appraised the collection between $7.3 million and just over $11 million, according to testimony Thursday.
Stephen Spencer, a director at restructuring bank Houlihan Lokey Howard & Zukin, which handled the auction, testified that Hilco's proposed equity structure was more transparent, benefiting creditors. He also said Hilco's branding model would require less working capital than Patriarch's.
Polaroid filed for bankruptcy in December, shortly after Minnesota businessman Tom Petters was indicted on charges of running a $3.5 billion Ponzi scheme. Petters denies the charges and is preparing for a trial. Petters purchased Polaroid in 2005 for $426 million. The court-appointed attorney managing his estate filed an affidavit Monday saying Petters bought Polaroid with money he fraudulently obtained through his financing entity Petters Co. Inc., reports the Star Tribune.
A tumultuous auction for Polaroid Corp. ended last Thursday with a St. Paul, Minn., bankruptcy judge declaring liquidators Hilco Consumer Capital of Toronto, Ontario, Canada, and Boston, Mass.-based Gordon Brothers Brands the winner with a bid of $85.9 million in cash and equity, reports the Star Tribune. The joint venture's bid was nearly a half million dollars lower than Patriarch Partners', but the judge deferred to creditors who urged him to approve the joint venture's bid as the best choice because of protections it offers them as minority shareholders.
It was the third round of bidding for the photo icon since the bidding began March 30, with each of the top two bidders winning once, only to have the auction reopened each time. Patriarch Partners, a New York private equity firm, technically won the auction in court with its high bid of $86.4 million, but it could not prevail as the "highest and best" bid without the judge's final approval, says the article.
Hilco and Gordon Brothers have purchased other distressed companies, including Linens 'N Things, Bombay Brands, and Sharper Image.Their bid was significantly higher than the original bid of $43.58 million in March.
Both bids included 25 percent equity in the new Polaroid, the maximum allowed in the auction, but differed primarily on the cash amount, the equity structure and the value of excluded assets, reports the Star Tribune. Patriarch's bid included Polaroid's large art collection with original works by Ansel Adams and Andy Warhol. The Hilco group's bid did not. The collection was given an estimated value of $6.5 million in the auction, but New York auction house Sotheby's actually appraised the collection between $7.3 million and just over $11 million, according to testimony Thursday.
Stephen Spencer, a director at restructuring bank Houlihan Lokey Howard & Zukin, which handled the auction, testified that Hilco's proposed equity structure was more transparent, benefiting creditors. He also said Hilco's branding model would require less working capital than Patriarch's.
Polaroid filed for bankruptcy in December, shortly after Minnesota businessman Tom Petters was indicted on charges of running a $3.5 billion Ponzi scheme. Petters denies the charges and is preparing for a trial. Petters purchased Polaroid in 2005 for $426 million. The court-appointed attorney managing his estate filed an affidavit Monday saying Petters bought Polaroid with money he fraudulently obtained through his financing entity Petters Co. Inc., reports the Star Tribune.