Polaroid, the company that pioneered instant photos, announced this evening it was filing for bankruptcy protection in an effort to reorganize its debt.
In a statement, the company said it would seek protection under Chapter 11 of the bankruptcy code, citing a "steep decline in its revenues and the resulting impact on its liquidity."
But Polaroid said it is "open and conducting business in the US and elsewhere around the world" and that its non-US subsidiaries, including those in Europe, Asia and Japan, are not part of the filing.
It also said it had obtained a commitment for $50 million in financing from a bank group led by J.P. Morgan Chase and Co. to pay its expenses as the bankruptcy plan is considered in the courts.
Polaroid also said that the company and its lenders have agreed to "accelerate and intensify its exploration of a possible sale of all or parts of the company."
"Polaroid believes that such a sale would be in the best interests of all constituencies, including employees. As previously announced, Polaroid has retained financial advisors to assist with this process," the statement said.
Mr Gary DiCamillo, chairman and chief executive officer, said, "After a thorough analysis of Polaroid's financial condition and the rapidly changing outlook in our key markets, the board of directors and senior management concluded that today's court filings by our US operations were both prudent and necessary. Despite our best efforts to stabilize revenue, reduce costs and maximize cash flow, the company's financial condition deteriorated further in recent weeks."
Caught between the slowing US economy and tough competition from digital imaging, Polaroid has been battling hard to find its feet in recent years.
Polaroid, the inventor of the instant photo, announced earlier this year that it was cutting nearly 3,000 jobs to bring its payroll to no more than 5,500 people by the end of next year.
Polaroid shares last traded Tuesday at 28 cents, from a 52-week high of $13.12.
AFP