A class action has been filed against certain of the former officers of camera company Polaroid Corporation (formerly OTCBB: PRDCQ and PRDQE, NYSE: PRD) and its former auditor, KPMG LLP, by stockholders who purchased the company's common stock between April 2 and August 16, 2001. The action claims that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. The stockholders seek to recover compensatory damages for the loss of value of their stock.

The action alleges that Polaroid's year-end 2000 and first-quarter 2001 financial statements were false and misleading due to: (1) the improper inclusion of deferred tax credits that had little or no future value; (2) the improper reversal of reserves in the fourth quarter of 2000; and (3) the company's failure to properly classify its debt as short-term. In addition, the unqualified audit and review opinions issued by KPMG during this time period were false and misleading due to the foregoing GAAP violations and KPMG's failure to issue a "going concern" qualification.

The former officers named as defendants in the action are CEO Gary DiCamillo, CFO Carl Leuders, and Controller Donald Halsted.

Polaroid Corporation entered bankruptcy protection, and substantially all of its assets were sold to OEP Imaging Operating Corporation on July 31, 2002. As part of the agreement, OEP Imaging changed its name to Polaroid Corporation and the former Polaroid Corporation changed its name to Primary PDC, Inc. Primacy PDC exists simply to handle claims against the former Polaroid Corporation.