U.S.

Polaroid Poised For Bankruptcy?

July 11, 2001 / 3:56 PM EDT / CBS/AP

Polaroid Corp., facing the imminent expiration of a large line of credit, is seriously considering a voluntary bankruptcy filing to protect it from creditors, according to a published report.

Shares of Polaroid fell 37 percent on the news.

The Wall Street Journal, citing people familiar with the discussion, reported Wednesday that the company is considering a so-called prepackaged bankruptcy filing in which the company and creditors develop a plan to rework debt, then submit the plan to a bankruptcy court.

Other options include selling more of the company, but Polaroid has already sold off real estate assets, suspended its dividend and gone through two restructurings that cut its work force by 35 percent in the last year.

The company, facing the expiration of a $360 million line of credit Thursday, is in negotiations with lenders to grant a waiver.

On Wednesday, Polaroid spokesman Skip Colcord declined to comment on the Journal report.

"It's speculation and we don't ever comment on speculation," he said.

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"The only thing I can tell you at this point is our focus is on the loan covenants and that we're having discussions with the bank," he said. "The discussions are going well. We expect to have an announcement shortly."

In midday trading on the New York Stock Exchange, Polaroid shares were down $1.01 at $1.69.

The Journal reported the company has lenders representing more than half the loans who support the waiver, which would be the threshold for a waiver.

Colcord said the company had no commitments from lenders.

"If we had commitments, we'd have a waiver," he said.