Opinion ID: 2785010
Heading Depth: 3
Heading Rank: 4

Heading: Polaroid’s CEO’s Objection

Text: Also relevant to our inquiry, although not an enumerated statutory badge, is Polaroid CEO Mary Jeffries’s objections to the TSA. At the time the TSA was executed, Polaroid had been operating at a loss and had a cash shortage, causing it to be delinquent on its payments to vendors—a problem exacerbated by Petters’s “loans” of Polaroid money to PCI. In an attempt to alleviate these problems, Polaroid -13- was exploring financing options from a number of different sources. After first receiving a copy of the TSA on September 11, 2008—eight days before the document was signed—Jeffries informed Petters and another PGW official that she opposed the TSA. Jeffries feared the TSA would “ma[k]e it difficult to raise new financing for Polaroid . . . [b]ecause it was taking assets that would otherwise be used as collateral or value in Polaroid in raising capital.” Polaroid’s issuance of a lien on its valuable trademarks over the objection of its own CEO is relevant in attempting to discern Petters’s intent. Ritchie claims “Jeffries’s ‘objection’ to the Liens carries no weight” because she was not aware of the carve-out in the TSA allowing Polaroid to use the trademarks to secure up to $75 million in working capital, which Ritchie alleges was more than sufficient to meet Polaroid’s cash flow needs. To the contrary, Jeffries’s objection gives insight into Petters’s intent in executing the liens because it suggests Petters chose to issue the liens even knowing Polaroid’s CEO feared the liens would thwart Polaroid’s efforts to raise much-needed capital. Jeffries’s lack of knowledge of the carve-out does not change this contention. Polaroid was seeking funding from multiple sources and, at the time the liens were executed, was negotiating with both a potential lender and a potential purchaser of Polaroid stock. The liens, even with the carve-out, reduced the collateral Polaroid had available to secure loans and had the potential to decrease Polaroid’s value to an interested purchaser. Our focus is on Petters’s intent, and Ritchie has presented no evidence suggesting Petters was aware of Jeffries’s lack of knowledge of the carve-out. Petters executed the liens over the objection of Polaroid’s CEO and complicated Polaroid’s efforts to secure capital to repay its creditors.7 7 In addition to the issue of Polaroid’s solvency, the parties dispute whether the encumbered trademarks were “substantially all” of Polaroid’s assets. See Minn. Stat. § 513.44(b)(5). Because this case comes to us at summary judgment, we construe fact disputes in Ritchie’s favor. See Cochrane, 124 F.3d at 981. Even assuming Polaroid was solvent and had assets beyond the encumbered trademarks, the undisputed fact -14- We have no hesitation affirming the bankruptcy court’s grant of summary judgment in favor of the trustee because Petters, acting on behalf of Polaroid, executed the liens with the actual intent to defraud Polaroid’s creditors. Ritchie argues there can be no presumption of fraudulent intent because the trustee cannot prove Polaroid “removed, concealed or absconded with assets following the transfers,” referencing Minn. Stat. § 513.44(b)(6), (7). Even at summary judgment, the law does not require the trustee prove all of the badges. “Once a trustee establishes a confluence of several badges of fraud, the trustee is entitled to a presumption of fraudulent intent.” Kelly, 141 F.3d at 802 (emphasis added). We find sufficient undisputed evidence to support the bankruptcy court’s conclusion that Petters executed the TSA with the intent to hinder, delay, or defraud Polaroid’s creditors.8