Polaroid trustee’s $260.4 million Petters and Lancelot deal approved

By Caroline Salls

Pittsburgh, Dec. 22 – Polaroid Corp. Chapter 7 trustee John R. Stoebner obtained court approval of a claim settlement reached with trustees for Petters Capital, Petters Group Worldwide and the Lancelot Investors Fund, according to an order filed Dec. 21 with the U.S. Bankruptcy Court for the District of Minnesota.

Stoebner said the Petters and Lancelot entities sought payment of more than $260.4 million in unsecured and secured claims against the Polaroid bankruptcy estates.

Under the settlement, the Polaroid trustee will pay $40 million in partial satisfaction of secured portions of two Petters Capital claims.

After creditors holding allowed unsecured claims in the Polaroid case who are not parties to the settlement receive distributions equal to 30% of their allowed claims, the next $5 million of distributable cash will go to Petters Capital. After that, all distributable assets held or acquired by Polaroid will be split between the Polaroid estates and Petters Capital.

In addition, a total of $15.58 million of Petters and Lancelot unsecured claims will be allowed.

Polaroid, a Minnetonka, Minn., instant and digital imaging company, filed for bankruptcy on Dec. 18, 2008. Its Chapter 7 case number is 08-46617.

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