Backlash from last year’s $20 million-plus McDonald’s consumer sweepstake scam has driven Simon Worldwide, the promotion’s organizer, to the verge of bankruptcy.
The walkout of its two largest clients – McDonald’s and Philip Morris – plus a net loss of $122 million ($750 a share) for the year to December 31 2001, the resignation two weeks ago of ceo Allan Brown [WAMN: 26-Mar-02], and its imminent delisting by Nasdaq, has led the company to contemplate bankruptcy.
Its annual filing with the Securities and Exchange Commission warns that Simon expects to liquidate its holdings, possibly through bankruptcy.
The group’s main operating unit, Simon Marketing, was involved in the ring that allegedly defrauded McDonald’s customers of over $20 million in prize winnings and the firm’s security director Jerome P Jacobson was subsequently arrested on charges of mail fraud.
Data sourced from: AdAge.com; additional content by WARC staff