Patriarch Partners, a private equity company in New York, appears to have won the auction for Polaroid Corp. with a $59.3 million bid for the fallen instant-photo icon. The sale isn't sealed however, as it requires the approval of a bankruptcy judge who must now sort through a flurry of objections to the deal, including one filed by creditors charging that the two-day auction was chaotic and flawed.

A hearing is scheduled for Monday in St. Paul.

The Polaroid auction is part of the storm of litigation swirling around Minnesota businessman Tom Petters, who was jailed last fall on charges of masterminding one of the largest Ponzi schemes in U.S. history. Petters himself specialized in buying distressed companies and paid $426 million for Polaroid in 2005. Most of Petters' corporate menagerie now sits in bankruptcy. Polaroid has taken the spotlight, though, because it has some actual value and can thus help repay myriad creditors and investors who claim they lost money with Petters.

Petters, 51, of Wayzata, denies the charges against him and is preparing for a June trial.

Patriarch's winning bid includes $43.2 million in cash, $7.8 million in stock in the new entity -- a 12 percent stake -- but excludes $8.3 million in various Polaroid assets. Among the excluded items are millions of dollars of instant film and Polaroid Japan, according to court documents filed Friday.

Included in the proposed deal is Polaroid's multimillion-dollar art collection -- a stash including more than 600 original Ansel Adams photographs, 13 original Andy Warhol photographs and thousands of museum pieces. Polaroid previously estimated the art to be worth nearly $9 million. New York auction house Sotheby's has been hired to appraise it.

Lynn Tilton, chief executive of Patriarch Partners, issued a statement Friday saying that Patriarch will try to rebuild the Polaroid brand and "re-establish Polaroid as a globally acknowledged innovator."

Mary Jeffries, Polaroid's chief executive officer, says in the statement that Patriarch Partners "has the vision and the resources to act on the myriad of opportunities to leverage this iconic brand."

Court documents show that Polaroid had been shopped to some 200 potentially interested parties. Patriarch was one of three main bidders at the auction, which took place Monday and Tuesday. PHC Acquisitions, an affiliate of Luxembourg-based private equity firm Genii Capital SA, kicked off the Polaroid auction in January with a "stalking horse" bid of $43.6 million. A third bidder, a joint venture of Hilco Consumer Capital LP of Toronto and Boston-based Gordon Brothers Brands, bid $61.2 million bid, according to court documents. That bid included more equity and less cash.

Petters' unsecured creditors on Friday opposed Patriarch's win, saying its bid was accepted despite being about $2 million lower than Hilco's. The group accused the auctioneer of running a rushed and chaotic auction in which, at one point, Hilco was given just 5 minutes to make a counteroffer. The unsecured creditors group has asked that the auction be reopened.

Auctioneer Houlihan Lokey Howard & Zukin, the Los Angeles-based company helping Polaroid restructure, couldn't immediately be reached for comment. Polaroid wouldn't discuss the auction.

Ritchie Capital Management of Lisle, Ill., and Acorn Capital of Greenwich, Conn. -- two hedge funds that are major Petters creditors -- have also opposed the Polaroid sale on multiple grounds. Ritchie argues that the auction process was flawed and that the winning Patriarch bid does not maximize Polaroid's assets. Ritchie has a lien on Polaroid trademarks in China, India and Brazil as security for a loan to Petters last year.

Polaroid responded Friday with a court filing asking that Patriarch's bid be approved, saying the company's value is eroding quickly and that Patriarch's bid is the "highest and best value that can be obtained for Polaroid's assets." It described the auction as "robust and open."

Jennifer Bjorhus • 612-673-4683