Examiner finds no problems with Polaroid bankruptcy
BOSTON (AP) - An independent examiner found no evidence of accounting irregularities related to the 2001 bankruptcy of film and camera company Polaroid Corp., according to papers made public Friday.
The examiner, Perry Mandarino, was appointed after some creditors, former employees and retirees alleged that company executives and directors channeled bonuses, deferred salary and pension money to themselves as they prepared the company's bankruptcy filing in October, 2001.
There were also claims Polaroid undervalued its assets, suggesting the bankruptcy filing was unnecessary, as well as criticisms of the auction that resulted in sale of the company's assets for $255 million in June 2002.
But Mandarino found no evidence of wrongdoing and concluded that, during the quarter prior to the bankruptcy filing, Polaroid's finances "may actually have been more negative than as reflected in its public filings with the SEC.''
Polaroid is now a separate entity from the bankrupt company and owned by One Equity Partners, a division of Chicago-based Bank One Corp.
"We're pleased the examiner's report resolves questions raised during the Chapter 11 (bankruptcy) process, and we can now better focus our resources on continuing to build the Polaroid business and launching our new digital printing technology,'' said Skip Colcord, a spokesman for the new entity.
Polaroid's former auditor, KPMG LLP, had sought to block the release of parts of the report, claiming the documents were confidential, but a judge ordered the documents made public earlier Friday.
The report contains an extensive analysis of Polaroid's accounting but concludes the accounting methods questioned in the allegations "did not materially undervalue and/or result in inappropriate liquidation of the Debtors' assets.''
Founded in 1937 by Harvard University dropout Edwin Land, Polaroid became one of America's most admired companies, but in its final years, it was beset by management problems.
It built nearly $1 billion in debt defending a takeover attempt in the 1980s and investing in products that never caught on. - AP
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