Publishers Clearing House, the sweepstakes company known for showing up at people’s homes to present winners with larger-than-life checks, has filed for Chapter 11 bankruptcy.
According to court documents filed Wednesday in New York, the company has just $490,000 in cash and is over $40 million in debt.
As part of the filing, Publishers Clearing House announced its intentions to ditch the direct mail catalog marketing and magazine subscription businesses that established it as a household name after it was founded in 1953. Despite bringing in $879 million in revenue in 2018, the company has seen a steady decline in the following years as customers shifted to online shopping.
Instead, the company will focus solely on its digital advertising and online gaming businesses.
But the long-standing giveaways will remain. The company’s weekly $10,000 sweepstakes has often been featured in commercials, with its Prize Patrol showing up at someone’s home unannounced and presenting an oversized check to the unsuspecting winner.
“Today marks a crucial development in our transition to a digital advertising-supported entertainment company,” CEO Andy Goldberg said in a statement. The company is “taking action to establish a strong foundation for our future,” he continued.
“Importantly, our world-renowned sweepstakes will continue to be a cornerstone of our experiences, and we intend to continue offering free-to-play entertainment and awarding prizes in the ordinary course of business during and after this process to uphold the historic legacy of Publishers Clearing House.”
Since its inception, the company has awarded more than $500 million in prize money.
Currently, Publishers Clearing House doles out $30,000 per week in winnings, court documents revealed. About $1.8 million is owed to recent winners, and another $26 million is owed to lifetime winners over the next 60 years. The company also owes money to employees, vendors, service providers, and landlords, according to the documents.
Meanwhile, the company’s name has been used in several recent scams, prompting widespread warnings to potential victims. Often targeting the elderly, scammers lure victims in with the promise of prize money before draining their bank accounts. Scams have been detected via text messages and fake social media profiles.
The company has responded with a warning of its own, urging caution. “If anyone is contacting you claiming to be associated with PCH, they are illegally representing themselves,” a message from the company read. “Do not continue any type of conversation with them, do not provide personal information and do not send money. They are imposter scammers using the trusted PCH name.
