Jersey City, NJ-based American Family Enterprises, sponsors of the American Family Publishers sweepstakes, said that the United States District Court of New Jersey has preliminarily approved an agreement that settles the outstanding legal claims of all class action and other private lawsuits filed against the company.
AFE recently filed for Chapter 11 protection in federal court in Newark, NJ. The decision to settle without admission of any wrongdoing enables AFE to avoid litigation by implementing a variety of consumer-oriented initiatives and establishing a $33 million consumer fund.
The settlement relates to all AFP sweepstakes mailings received by consumers after January 20, 1992. In addition to the consumer fund, the settlement includes a special sweepstakes of $1 million (to be awarded in 10 prizes of $100,000 each). The fund will be available to those consumers who certify through a claims process that they believed that purchasing magazines or merchandise was necessary to win a prize or would enhance their chances of winning. In addition to the consumer fund, AFP will pay legal fees, administrative, and notice costs associated with the settlement.
As a part of the settlement, American Family Publishers also voluntarily agreed to changes in its mailing materials such as:
* Inclusion of clear and conspicuous “No Purchase Necessary” messages in the Official Rules and the copy of the mailings;
* The printing of Official Rules in 8-point type, and in such a way that they may be retained by consumers after entering the sweepstakes;
* Clear disclosure of the estimated odds of winning the sweepstakes prizes in the Official Rules; and
* No representation that the recipient is a winner unless in fact the recipient is a winner.
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