Polaroid Sale Seems to be in the Can

July 30, 2002 (PLANSPONSOR.com) - Polaroid retirees may wish it weren't so, but it looks like the last-ditch effort to attract a new offer for the bankrupt photography firm won't materialize.

Rival bidder Deutsche Bank says it won’t challenge the June 26 auction result that awarded Polaroid’s assets to One Equity Partners (OEP), according to a report from the Associated Press, citing a Deutsche Bank official who insisted on anonymity.  OEP is the venture capital arm of Bank One.

Week’s Worth

A week ago the 6,000-member Polaroid Retirees Association had lined up with a group of shareholders opposed to a planned sale of the firm to Bank One’s One Equity Partners (OEP). 

There were reports of a competing bid for Polaroid’s assets to Deutsche Bank – who reportedly would have taken over the struggling pension plan and kept it going.  There were reports that those same retirees might get an ownership stake in a new company.  And current shareholders, which include Polaroid ESOP plan participants, who stand to get nothing under the OEP plan, reportedly stood to get as much as a 4% stake in the new company.

A week ago the Massachusetts congressional delegation was following up on those rumors, going so far as to ask Deutsche Bank to clarify its intentions regarding a bid for Polaroid.

“Chapter” Verse

Polaroid filed for Chapter 11 bankruptcy protection last October, but it’s financial struggles have had a growing impact on the benefits and retirement savings of both current and former workers (see Polaroid’s Woes Extend to Retirement Plans , DoL Turns up Heat on Polaroid , Massachusetts Probes Origins of Polaroid ESOP ) but the firm has continued to operate.

While the stock values of the firm may be unrecoverable, Polaroid’s pension plan is likely to be picked up by the Pension Benefit Guaranty Corporation (PBGC), though benefits would be capped at about $43,000 annually (see Polaroid Retirees Try To Block Executive Bonuses ).