Some companies and investors are challenging a court-ordered motionless on formal lawsuits against Polaroid Corp. in the spoor of the $3 billion inveigler box against Minnesota businessman Tom Petters. The sideshow to the bad chest against Petters played out Friday in Minneapolis before U.S. District Judge Ann Montgomery, with attorneys arguing that she should encouragement the line she imposed on lawsuits against a copy of Petters' companies so that they can court their non-stop individual disputes with Polaroid, a Petters subsidiary.
Montgomery put the brakes on such polished complaints in tardy October because so many persons were suing Petters and his myriad companies that the actions threatened to oppress the receiver she appointed to bring off the companies. Montgomery also heard a offering Friday to fine-tune terminology describing the lines of receiver Doug Kelley. She's expected to ordinance on the motions soon. Petters, 51, of Wayzata, has been jailed since his nab Oct. 3 and faces charges of on-going one of the largest Ponzi schemes in U.S. history.
The tangled investor guile invalid is playing out simultaneously in criminal, cordial and bankruptcy courtrooms. Although Polaroid is not amongst the 10 Petters companies in Chapter 11 bankruptcy, it is fragment of the receivership and was always meant to be -- a plan that Montgomery emphasized Friday. Those seeking to disappear the interrupt on courteous lawsuits embody South Korea-based LG Electronics Inc. and subsidiary Zenith Electronics, which have continuous control disputes with Polaroid relative its flat-screen televisions.
Acorn Capital Group, a hedge mine in Greenwich, Conn., that lent Petters $300 million, also wants the check lifted, because $25 million of the investment went to Polaroid, which recently defaulted. The funding was secured by Polaroid's inventory and receivables, according to Acorn. Property rights asserted The electronics companies argued that Polaroid is an self-governing associates that hasn't been accused of wrongdoing, and that their prominent cases should be treated differently from the mound of purely pecuniary claims against Petters.
Acorn argued that the Fifth Amendment to the Constitution protects their capital rights with reference to the Polaroid collateral. Terry Fleming, an attorney for receiver Kelley, who is in censure of managing Petters' bevy of companies, called attempts to take the gird premature. Kelley's berth has been on the craft just two months and needs more spell to achieve pilot of Petters' estate, he said. The U.S. Attorney's branch agreed.
"At this dot we don't grasp if Polaroid was propped up by fraud," helpmate U.S. Attorney Robyn Millenacker told Montgomery. The evaluate also considered a travel filed by Kelley at month to upon her native receivership orders.
Among other things, Kelley proposed tweaking the style to bid that, while the bankruptcy convention governs matters in the bankruptcy court, authority claims of forfeiture or reinstatement for victims can still proceed.
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