Polaroid agrees to sell most assets to Bank One Corp. for $265 million

Friday, April 19th 2002, 12:00 am
By: News On 6

BOSTON (AP) _ The once-mighty instant camera company Polaroid Corp. agreed to a major sale of assets as it sought to emerge from Chapter 11 bankruptcy protection.

The company said Thursday that it had agreed to sell most of its assets to Bank One Corp. for $265 million. Polaroid reached the agreement with One Equity Partners, the private equity arm of the nation's sixth-biggest financial institution.

The agreement appears to make no mention of liabilities for the company's pension fund, however, which could be bad news for retirees.

Ulysses Yannas, an analyst with Buckman, Buckman & Reid, said Polaroid would likely continue to operate because its core business and brand remain strong despite the company's financial problems.

``It was never a question of Polaroid disappearing,'' Yannas said.

Bank One spokesman Tom Kelly declined to comment on any plans for Polaroid should the sale be approved by bankruptcy court. Polaroid said stockholders will not likely be able to recover any of their investment in the company.

A hearing is scheduled for May 6 to set an auction date for the assets, which include all domestic businesses and the common stock of the company's foreign subsidiaries. If no bidders come forward with a higher price in the auction, the deal could close within four to six weeks, Polaroid spokesman Skip Colcord said.

Filings related to the plan submitted in U.S. Bankruptcy Court in Delaware appear to indicate that One Equity would not acquire any obligations related to Polaroid's pension plan.

Polaroid retirees have lost benefits and been told the pension fund is underfunded. Colcord said retiree benefits are guaranteed to some degree by the quasi-public Pension Benefit Guarantee Corp. but could not provide specifics.

``We're a little disappointed that Polaroid didn't see fit to include the retirees in these discussions, and similarly disappointed that Bank One has indicated they are not going to assume the pension plan,'' said Scott Cousins, an attorney for the retirees.

Polaroid, the creation of scientist Edwin Land that delighted generations with its instant cameras and film, faced nearly $1 billion in debts when it filed for bankruptcy in October.