Polaroid Corporation, maker of instant cameras, has received bankruptcy court permission to sell is assets through an auction. The auction will be held on 30 March, court documents showed.

US bankruptcy Judge Gregory Kishel gave the go-ahead for the sale of Polaroid Corporation, one of the few tangible assets of Petters Group Worldwide, with bids opening at $42 million.

Polaroid filed for Chapter 11 bankruptcy protection in December amid allegations of fraud against the founder of Petters Group Worldwide that owned the company.

Sources close to the development say that with so many litigations and a number of attorneys involved in the Petters case, there will hardly be anything left for creditors now.

A group of creditors had, in fact, filed objections to the deal last week, saying the proposed deal undervalues the company's brands and trademarks.

The bankruptcy judge approved the auction sale of the company despite the objections of two Petters creditors - Richie Capital Management and Acorn Capital Group – saying the auction will help realise the intrinsic value of the Petters estate.

The minimum bid of $42 million is the amount offered by a Delaware firm called PHC Acquisitions, an affiliate of Geni, for Polaroid Corp. This amounts to 10 per cent of the $426 million that Tom Petters paid for Polariod in 2005.

Petters' business entities, which are under investigation over alleged fraud, are in receivership and bankruptcy. Petters, however, deny any fraud at his group.

Petters, 51, has been charged with conspiracy, fraud and money laundering and is in federal custody pending trial.