UPDATE 1-Hilco-Gordon JV wins Polaroid with $87.6 mln bid

(Adds comments from Hilco and Patriarch, background)

NEW YORK, April 16 (Reuters) - A federal bankruptcy judge ruled on Thursday that an $87.6 million bid by a joint venture of investors Hilco Consumer Capital and Gordon Brothers Brands won the auction for bankrupt camera maker Polaroid’s assets after 16-day auction process.

The joint bid by Hilco and Gordon Brothers was deemed to be the “best offer” by Judge Gregory Kishel of the U.S. Bankruptcy Court for the District of Minnesota, over private equity firm Patriarch Partners’ higher $88.1 million bid, which included more cash but left fewer existing Polaroid assets with its estate.

The auction process was re-opened on two occasions, following objections the first time by creditors, and again last week after Patriarch asked that bidding be continued.

Hilco and Gordon Brothers, which specialize in brand licensing are investment divisions of the large liquidation firms The Hilco Organization and Gordon Brothers Group. The joint venture partners have said they intend to keep the Polaroid brand alive.

“The Polaroid brand has immense global appeal that translates into almost all categories,” said Hilco Consumer Capital Chief Executive Jamie Salter in a statement.

A spokesman for Patriarch Partners told Reuters the firm will appeal the ruling, saying, “in an open auction things are supposed to be transparent and the highest bidder is supposed to win.”

Hilco and Gordon have been joint venture partners in their recent acquisitions of The Sharper Image and Bombay brands.

Patriarch. whose portfolio includes Arizona brand iced tea and mapmaker Rand McNally, had said it intended to rebuild Polaroid as a company.

A spokesman for Ritchie Capital, one of Polaroid’s creditors, who was in the courtroom told Reuters, “The compensation is trivial compared to the value that could have been realized through a re-organization.”

The “stalking horse bidder,” Luxembourg-based Genii Capital SA, started the bidding for the company with a $42 million offer on April 1.

Polaroid filed for bankruptcy protection in December 2008, amid an investigation into the founder of its owner, Petters Group Worldwide.

The case is In re: Polaroid Corp et al., U.S. Bankruptcy Court for the District of Minnesota, No. 08-46617. (Reporting by Phil Wahba)