Embattled Promotions Shop May Be Forced to Sell Off Holdings

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CHICAGO ( -- Seven months after being implicated in an alleged multimillion-dollar sweepstakes fraud scheme, losing its two biggest clients and announcing two weeks ago the resignation of its CEO, embattled promotions company Simon Worldwide disclosed it expects to sell off its holdings.

Simon Worldwide posted a net loss of $122 million, or $7.50 per share for the year ended Dec. 31 and said it expects to liquidate it holdings, possibly through bankruptcy, the company disclosed in its annual filing with the Securities and Exchange Commission.

The Wakefield, Mass.-based company disclosed its credit facilities will begin expiring in May and that it faces difficulties securing additional credit.

Nasdaq delisting
Simon also has

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Move Comes in Wake of McDonald's Sweepstakes Scam
been informed by Nasdaq that its stock will be delisted on May 15.

In the filing, Simon reiterated doubts about its ability to continue and said it would cut its worldwide workforce to 46 by the end of the first quarter.

Simon Marketing, the primary operating unit of Simon Worldwide, was implicated in the scam that allegedly defrauded McDonald's customers of more than $20 million in prize winnings.

Simon security director Jerome P. Jacobson was arrested on charges of mail fraud related to several McDonald's promotions.

As a result, Simon Worldwide lost top clients McDonald's, which accounted for 78% of its 2001 sales, and Philip Morris Cos., which accounted for 8%.

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