Polaroid filed for Chapter 11 bankruptcy protection on Friday, but no, it's not because almost nobody wants its self-developing film anymore.
Instead, the company said that its filing, which permits the company to undertake a financial restructuring, is related to a fraud matter involving Petters Group Worldwide, owner of Polaroid since 2005.
"Polaroid's financial condition was compromised by the apparent fraudulent acts perpetrated by the founder of Petters Group Worldwide, Polaroid's parent company, and certain of his associates," the Minnetonka, Minn.-based company said in a statement Friday. "The Chapter 11 process will provide Polaroid with the opportunity to restructure its balance sheet and reduce its debt to ensure the future health and sustainability of the business."
The company has "ample cash reserves" to finance the restructuring, with no new financing needed, and Chief Executive Mary L. Jeffries said operations will continue. The company's once-iconic film and film-camera business has largely fallen by the wayside, but it still sells flat-panel TVs, printers, digital cameras, and other products.
"We expect to continue our operations as normal during the reorganization and are planning for new product launches in 2009," Jeffries said. "Our operations are strong and during this process Polaroid will ship products to our retail partners, work with our suppliers and contract manufacturers to fulfill retailer demand, honor customer warranties, and employees are expected to receive their regular paychecks without interruption."
Tom Petters and four others were charged in October with participation in what authorities said was Ponzi scheme involving investment fraud, according to the Star Tribune of Minneapolis and St.Paul.
With a recession under way, it's a tough time to be getting a business back on track. But the company can take some consolation that others also are suffering.
Canon, the top digital camera maker, said it will delay construction of a new digital camera factory in Nagasaki, Japan, because of slowing consumer demand, Reuters reported Thursday. In July, the company had said it planned to start building the plant in January and begin producing cameras there in December 2009.
This week, it's medicine vs. Madison Avenue.
On Monday, Johns Hopkins University's Bloomberg School of Public Health announced study results that for children aged 2.5 to 5.5, watching more than 2 hours of TV a day can lead to behavioral problems and poor social skills. A day later, Panasonic announced its "Bring Back Family Time" advertising campaign that promotes its high-definition TV products as a way to get families to spend more quality time together.
Quotations from the respective announcements couldn't contrast more sharply. Can you match which came from Kamila Mistry, lead author of the Johns Hopkins study, and which came from Debra Bass, vice president of consumer marketing at Panasonic Consumer Electronics?
• "Our goal is to challenge consumers in a way that gets them to consider the amazing high-definition technology that they can use to create special family times that they can enjoy together."
• "Reducing viewing to acceptable levels can reduce the risk of behavioral and social problems."
The answer, obviously: Panasonic is the one that equates TV time with quality time.
Of course, neither position is terribly surprising. Panasonic has a business to run, and giving away to 30 families each $20,000 worth of plasma TVs, video recorders, cameras and Blu-ray players is par for the course. As for Johns Hopkins, Mistry observed that "a number of studies have demonstrated negative effects of heavy television viewing." One from August, for example, found babies who watch TV develop speech more slowly.
There is a new angle from this study, though: the conclusion that problems are reduced if early viewing is reduced by the time the child reaches age 5.5. "Heavy television viewing that decreased over time was not associated with behavior or social problems," the university said.
The study also found an association between having a TV in the child's bedroom at age 5.5 and behavioral problems and poor sleep.
The researchers based their conclusion on a study of 2,707 children in the United States.
Whose advice will prove more important? Given that the study found 20 percent of parents reported their children both 2.5 and 5.5 years old already watch two hours of TV, and 41 percent of children in the study have a TV in their bedroom, it looks to me like Panasonic already has carried the day.
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