News Column

Polaroid Fotobar stores in financial peril

September 4, 2014

By Alexandra Clough, The Palm Beach Post, Fla.

Sept. 04--The colorful Poloroid Fotobar stores in Palm Beach County are seeing more red than black these days.

The stores that turn pictures into old-fashioned Poloroid photos are in financial trouble.

The owner of the stores, located in the Delray Marketplace shopping center west of Delray Beach, as well as the Town Center Mall in Boca Raton, is seeking an assignment of the company's assets to workout specialist Michael Phelan.

This move is being done in preparation for a sale of some of the assets, said Phelan, of Michael Moecker & Associates, a workout company based in Hollywood.

"I'm going to operate the company. I have a sale of some of some their assets to a new investment group that will bring fresh cash to the deal and carry the business forward," Phelan said.

"We already have a bidder intent on keeping it open as a going concern," said Boca Raton lawyer Brad Shraiberg, attorney for Phelan.

Phelan said it is likely the Delray Beach and Boca Raton stores will remain open.

But a store in the Falls shopping center in Miami, a store in Orlando, plus a location in Las Vegas, will probably close "sooner rather than later," Phelan said.

Fotobar LLC filed a petition in Palm Beach County Circuit Court on Aug. 27 to assign the company assets to Phelan for the benefit of creditors.

"The assignor is indebted to creditors and is unable to pay its debts and is desirous of providing for payment of its debts so far as it is possible," the filing states.

The filing lists $2.1 million in unsecured claims. Most of that is rent, according to the filing.

Phelan said the circuit court assignment often is done as an alternative to a bankruptcy filing, which is costlier and can take a long time to resolve.

The Fotobar stores are usually filled with a steady stream of customers looking for ways to display photos languishing on their smart phones. Pictures can be turned into Polaroid photos, mounted in shadowboxes or clipped to a string to hang along a wall.

The national testing ground for this new kind of photo store was at the Delray Marketplace store. Fotobar was developed by a Boca Raton entrepreneur and has its corporate offices in Boca Raton.

But despite the whir of activity at the stores, Phelan said the company ran into trouble due to high overhead expenses, such as the rent at its leased mall stores.

Although Fotobar's finances are shaky, there's reason to be optimistic, said Shraiberg, of Shraiberg, Ferrara & Landau.

A number of companies that are restructured "are much better off. I'm hopeful that it will happen in this case," Phelan added.


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Source: Palm Beach Post (FL)

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