Polaroid Photo Tour Of The Polaroid factory

the factory will close after 42 years of manufacturing.

Camera-maker Polaroid has filed for US Chapter 11 bankruptcy protection amid allegations of fraud by the founder of its parent group.

Polaroid has been owned by Petters Group Worldwide since 2005, which was established by Tom Petters.

Mr Petters is now "under investigation for alleged acts of fraud that have compromised the financial condition of Polaroid," the firm said.

Polaroid said neither itself or its bosses were under investigation.

Authorities believe that Tom Petters, the founder of Peters Group, was running a £3bn fraud scheme.

But Mr Petters, who is now in custody, has maintained his innocence.

Petters Group and its venture capital unit filed for Chapter 11 bankruptcy protection in October.

Instant photography

Polaroid said the restructuring shouldn't hit its day-to-day operations, and it is "planning for new product launches in 2009".

"Polaroid has entered bankruptcy with ample cash reserves sufficient to finance the company's reorganization under Chapter 11," it said.

Polaroid is best know for inventing instant photography.

But it stopped making the instant cameras about two years ago due to falling sales in the face of the growing popularity of digital cameras.