Former Publishers Clearing House Winners Face Uncertainty After Bankruptcy

A disabled Army veteran couple with three young children were initially told by PCH their quarterly prize payments would resume in July, but in April they learned the company had filed for bankruptcyImage Source: Shutterstock.com

Tamar andMatthew Veatchcounted on a yearly six-figure sweepsngakes check from Publishers Clearing House (PCH) to boost their Veterans Affairs disability income for four years. This February, the expected payout, just under $200,000 after taxes, did not show up.

PCH Sale to ARB Blocks Former Winners from Payouts

The couple, both disabled Army veteranswith three young kids, first got promises from PCHthat checks would start again in July, every three months, reported The Wall Street Journal. However, April brought bad news: the well-known sweepsngakes company went bankrupt, naming ten prize winners as some of its biggest unpaid creditors. Court papers reveal eight of them were owed over $2 million each.

When ARB Interactivebought PCH’s assets for $7.1 million in July, the Veatchesfound out that prizes given after July 15 would be paid. People who won before that date, they learned, need to go through bankruptcy court to get their money back, a process that ngakes a long time and might not work.

ARB, a company that makes mobile games and runs sweepsngakes, says it will make sure all future winners get paid by using a new system. This system will keep prize money separate from the company’s other money. ARBsaid in a statement that it understands why past winners are upset, but it is not required to pay debts from before it bought PCH.

PCH Cash Crunch Stops Lifetime Sweepsngakes Payouts to Veteran Couple

The Veatcheswon their prize in the famous “$5,000 a Week Forever”contest, which promised to pay the winner for life and then pay a chosen beneficiary. The couple says the extra money let them go on family trips and do things they could not afford before, like a trip to Europe for their anniversary and a train ride to Canada for their son during the holidays. Now that they do not have the money, they say their budget has gotten much tighter.

Darrell Lester, who used to work at PCHuntil 2003, said that in the past, the company made sure to pay prizes by buying prepaid annuities from banks. This meant winners would get their money no matter what happened to the company in the future. He pointed out that they stopped doing this later on.

PCH, which started in 1953and is known for its Prize Patrol,handing out big checks to winners who did not expect it, had been having a tough time for years. Less money from its old-school mail-order business, along with higher costs to run operations and owing $65 million, pushed the company to file for Chapter 11. The bankruptcy came after a pricey settlement with the Federal Trade Commissionin 2023 about misleading ads.

The Veatchesfelt more than just financial troubles when the payments stopped. They felt let down. They think an earlier warning could have helped them get ready. Now, they are stuck waiting and hoping that the bankruptcy process will give them what they were told they would get.