8-K

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 8-K


                                 CURRENT REPORT
                       PURSUANT TO SECTION 13 OR 15(d) OF
                     THE SECURITIES AND EXCHANGE ACT OF 1934


                                 DATE OF REPORT:
                                  June 6, 2006
                        (Date of Earliest Event Reported)


                              SIMON WORLDWIDE, INC.
             (Exact name of Registrant as specified in its charter)


                                    DELAWARE
         (State or other jurisdiction of incorporation or organization)



       0-21878                                           04-3081657
(Commission File Number)                    (I.R.S. Employer Identification No.)


           5200 WEST CENTURY BOULEVARD, LOS ANGELES, CALIFORNIA 90045
                    (Address of principal executive offices)
                                   (Zip code)


                                 (310) 417-4660
              (Registrant's telephone number, including area code)








ITEM 8.01 -- OTHER EVENTS

On June 6, 2006, the Registrant sent a letter to Everest Special Situations Fund
L.P. responding to Everest's letter dated May 11, 2006, which was filed as an
exhibit to its Schedule 13D dated the same date. The Registrant's letter is
filed as Exhibit 99.1 to this Report on Form 8-K.


ITEM 9.01 -- FINANCIAL STATEMENTS AND EXHIBITS

Exhibit 99.1: Letter dated June 6, 2006, to Everest Special Situations Fund L.P.



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                                    SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.


Date: June 7, 2006                       SIMON WORLDWIDE, INC.


                                         /s/ Terrence J. Wallock
                                         ----------------------------
                                         Terrence J. Wallock
                                         Assistant Secretary and General Counsel
                                         (duly authorized signatory)




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EX-99.1

                                                                    Exhibit 99.1
SIMON
WORLDWIDE
INC.




June 6, 2006

Mr. Elchanan Maoz
Everest Special Situations Fund L.P.
Platinum House
21 Ha'arbaa Street
Tel Aviv 84739 Israel

Re: Simon Worldwide, Inc. ("Simon" or the "Company")

Dear Mr. Maoz:

     We are writing to provide a response to your letter dated May 11, 2006.

     As members of the Company's Board of Directors, we share in and appreciate
your concern that the Company be managed in a way that maximizes its financial
performance, minimizes its expenditure of corporate assets, and preserves value
for its shareholders. However, we disagree with many of your letter's specific
assertions, as well as the general assertion that the Board of Directors has
failed to properly oversee the Company's operations. We appreciate the
opportunity to respond to your concerns and look forward to the opportunity to
discuss the future of the Company with you.

     BACKGROUND

     To understand the current situation, it is important to have some
background on the Company's history.

     Throughout the 1990's, the Company, then known as Cyrk, Inc., engaged in
successful marketing and promotions activities. In 1997, it acquired Simon
Marketing, Inc., a leading promotions contractor for McDonald's Corporation.
Simon's principal activity was the development and implementation of "Happy
Meal" promotions for McDonald's.

     The success of this business caused the Company to refocus its efforts
toward the McDonald's relationship; in 2001 the former Cyrk business was sold
and the Company re-named itself Simon Worldwide, Inc. In 1999, an affiliate of
The Yucaipa Companies known as Overseas Toys invested $25 million in Simon. The
terms of the investment, which included the liquidation preference and board
representation discussed in your letter, were negotiated at arms' length and
approved by an independent committee of the Company's Board of Directors after
receipt of a fairness


5200 W. Century Boulevard, Suite 420, Los Angeles, CA 90045 Tel: (310) 417-4660




opinion from Bear Stearns, and the investment was also approved by a stockholder
vote.

     In August 2001, the FBI announced that a Simon employee had been
systematically stealing numerous high-value McDonald's game-winning tickets.
Despite the FBI's conclusion that no other Company employee was involved and
that the Company was itself as much a victim of the crime as McDonald's, the
relationship of the Company with every major client, including McDonald's, was
soon terminated, and the Company was left with no ongoing operations.

     The Company found itself with virtually no revenue, numerous pending
lawsuits, and millions of dollars in outstanding obligations. Two of the
Company's directors appointed by Overseas Toys resigned to avoid any appearance
of a conflict of interest based on their service as directors of other entities
that had ongoing relationships with McDonald's. The third appointee continued to
serve as an independent director because he had no other relationships with
Overseas Toys or its affiliates.

     The typical course for the Board at that point would have been to put the
Company into bankruptcy. Overseas Toys and other creditors would have been left
with whatever remained after completion of the bankruptcy process. The fees for
bankruptcy attorneys, accountants, and other professionals would have been a
significant drain on the Company's remaining assets. In all probability, the
common stockholders would have received nothing.

     Instead of liquidating the Company, the Directors chose to work to save it.
They laid off approximately 500 employees. All senior officers were terminated.
The Board negotiated settlements with vendors and other creditors at all levels.
They closed Simon offices in 13 different cities, in 9 countries, repatriated
cash from Europe, Hong Kong, and other locations, and in general made an effort
to substantially reduce the ongoing expense rate of what had been a
multi-million dollar enterprise, which suddenly had its revenue reduced to
virtually nothing. As a result of these efforts, bankruptcy was avoided.

     In April of 2002, the Company sued its outside auditors for failing to
oversee the dishonest employee who misappropriated the winning tickets. As a
result, the auditors resigned and withdrew their opinions on the financial
statements for 2001 and the prior two years. The Company was forced to retain
new auditors, and, in order to bring its financial reports into SEC compliance,
the Company was required to reconstruct financial statements and to redo the
audits for the above referenced years. This endeavor was further complicated by
the fact that the Company's former headquarters office had been closed, the bulk
of the employees terminated, and a portion of the financial records and systems
transferred to an entity which had purchased a major division of the Company's
former business. It took more than a year and a half to complete this process.


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5200 W. Century Boulevard, Suite 420, Los Angeles, CA 90045 Tel: (310) 417-4660






     Meanwhile, Congress had passed the Sarbanes-Oxley legislation, which
required certification of the Company's financial statements by its CEO and CFO.
Given the Company's financial condition and pending litigation, the Company was
unable to attract senior officers. Fortunately, two Board members agreed to act
as Co-CEO's to certify the financials and provide that function going forward.
They also had extensive investment experience and relationships in the financial
world they would utilize going forward on behalf of the Company. Their
experience provided the Company, which had no revenue, with a critical and
important business skill set which otherwise could have only been provided
through expensive outside professionals, which would have been the only recourse
available to the Company given its inability to attract new qualified senior
management.

     Defending and prosecuting lawsuits as well as seeking and reviewing
investment opportunities for the Company, reducing overhead costs, continuing to
negotiate settlements with vendors, terminating Company benefit plans, and
completing the international withdrawal became the Company's principal
activities. Eventually the Company settled a major lawsuit with McDonald's, as
well as a consumer class action filed in the United States. Nevertheless, other
cases remained, including a consumer class action in Canada.

     Remarkably, despite the challenges outlined above, the Company has survived
with its current assets intact. It also has a substantial net operating loss
carry-forward and remains a public entity in full SEC compliance. The Directors
have attempted to use these assets to achieve value for all stockholders. The
Company has reviewed and explored more than 15 potential investments and other
strategic alternatives. It has consulted with independent investment bankers and
made known in the investment community its desire to find a merger partner or
other appropriate vehicle going forward. A serious impediment has been the
remaining lawsuits, particularly the consumer class action in Canada, which
seeks damages far in excess of the current remaining assets of the Company. When
the Canadian case is finally resolved, the Directors are hopeful that an
appropriate transaction which maximizes the value of the Company's assets can be
identified. In the meantime, the Company has continued to reduce its ongoing
costs and no longer has Co-CEO's. You should also be aware that the
Indemnification Trust established in 2002 expired in March of 2006, and all
funds held by the Trust have been returned to the Company with interest.

     RESPONSES TO SPECIFIC ISSUES

     Alleged Excessive Compensation

     Contrary to the assertions in your letter, the Company's Directors have not
been "asleep at the wheel." As referenced above, they have been managing the
defense and offense of the many significant lawsuits and diligently pursuing
strategic investments and opportunities and working on many other aspects of
preserving the assets of the Company. The compensation currently paid to these
individuals reflects their expertise and background and is to compensate them
for those efforts which will benefit all of the Company's shareholders,
including Everest. We believe the compensation is fair given the time and
expertise offered by the individuals.


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5200 W. Century Boulevard, Suite 420, Los Angeles, CA 90045 Tel: (310) 417-4660




     Moreover, we do not understand your call for the appointment of someone to
investigate "senior management" to be a demand that the Company sue any
particular officer or director. The appointment of such a person would likely
cause the Company to incur huge expenses it is ill able to afford and which are
unlikely to lead to any significant recovery to the Company. Finally, while you
refer to supposed conflicts of interest on the part of the Board, you identify
no such conflicts.

     As to your suggestion that the representation of Yucaipa on the Board be
eliminated, that representation was agreed to at the time Yucaipa invested in
the Company in 1999, was clearly disclosed in connection with the shareholder
vote, and presumably known to you when you made your investment in the Company
in 2006. The Board representation of Yucaipa is required by contract and cannot
be changed without Yucaipa's consent.

     Shareholder Involvement

     Your letter correctly notes that the Company has not held an annual meeting
since 2001 when the McDonald's incident occurred and the Company's operations
essentially ceased. During this time, the Board and Company's management have
been focused on saving the Company and identifying an investment that will
secure its future. The Board agrees that increased shareholder communication is
appropriate and will consider your request for a shareholder meeting.

     Investment Objectives

     With respect to your allegations about the Yucaipa liquidation preference,
it was granted as part of an arms' length negotiation in exchange for Yucaipa's
substantial investment, and was approved not merely by the Board, but by the
shareholders as well. Presumably, you were aware of the preference at the time
you invested in the Company. As far as we are aware, the Company cannot
unilaterally eliminate the contractually required liquidation preference.

     Finally, we do not take your letter to constitute a demand pursuant to
Delaware Chancery Court Rule 23.1, in which case, the Board would consider such
a demand separately. You state that you are disappointed that the Board has not
met with you. As far as we are aware, you have never sought a meeting with the
Board. You did request a meeting with a representative of Yucaipa, which we
understand did take place. Nonetheless, we stand ready to meet with you at any
time to discuss the issues raised in your letter, or any other matters affecting
the future of the Company.

                                          Sincerely,

                                          /s/ Joseph Anthony Kouba

                                          Joseph Anthony Kouba, CEO
                                          On behalf of The Board of Directors of
                                          Simon Worldwide, Inc.




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5200 W. Century Boulevard, Suite 420, Los Angeles, CA 90045 Tel: (310) 417-4660