Simon Worldwide, Inc.
Simon Worldwide, Inc. dba Simon Marketing (“Simon”) was a publicly-held, multinational, promotional marketing company, specializing in the design and development of high-impact advertising products and sales promotions. Among other innovations, Simon developed the long-running “Happy Meals” promotion for McDonald’s. Major customers included Philip Morris, McDonald’s and Ty’s Beanie Babies.
Simon was sent into a tailspin when a former employee embezzled winning game pieces to a promotional game administered by the company, prompting its two largest accounts―McDonald’s and Philip Morris―to terminate their relationships. The notoriety and litigation that followed damaged the reputation and business of Simon. Simon’s largest creditor at the time was Overseas Toys, L.P. (“Overseas”), an affiliate of Ron Burkle’s The Yucaipa Companies (“Yucaipa”). Overseas owned $25 million of preferred stock in Simon and had a warrant to purchase an additional $15 million of preferred stock.
Simon, which was cash-rich but dormant from a revenue-generation perspective, was slowly dissipating its cash due to having to make mandatory dividend payments on the preferred stock. Simon retained Greif & Co. to structure and ensure the fairness of a transaction with Overseas’ that would facilitate the conversion of the preferred stock into Simon’s non-dividend-bearing common stock.