Diamond Distribution has voluntarily filed for Chapter 11 bankruptcy protection and will begin reorganization processes immediately.
Diamond has been one of the primary suppliers in the comic industry for over 30 years, but with the onset of the COVID pandemic, things began to change. Since that time, more comic companies have cut their exclusivity deals with Diamond, including Marvel, DC, IDW, Image, Dark Horse, BOOM! Studios, and more. The combination of these events seems to be what is leading to the current event.
A press release covers the major aspects of the event.
Diamond Comic Distributors (“Diamond” or “the Company”), today announced that it has filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Maryland to facilitate the restructuring of its business. As part of the restructuring process, Diamond has received a $39 million stalking horse bid from an affiliate of Universal Distribution (“Universal”) for Alliance Game Distributors.
The Company has received commitments for up to $41 million in debtor-in-possession (DIP) financing from JP Morgan Chase that will be used to fund post-petition operating expenses and ensure adequate working capital to meet its obligations to associates and suppliers.
In addition to securing DIP financing, and a stalking horse bid for Alliance Game Distributors, Diamond has received strong interest in its specialized business divisions, having also entered into a Non-Binding Letter of Intent (LOI) with Universal to acquire Diamond UK. Diamond is actively pursuing offers for, and has received interest from potential purchasers for, its other business units, including Diamond Book Distributors, Collectible Grading Authority, and Diamond Select Toys, as well as its main comic, toy, and collectible distribution lines.
“Diamond has been a linchpin of the comic book industry for over four decades. Our priority has always been to provide quality service to publishers, retailers, and, ultimately, comic fans, and we remain committed to finding additional buyers for our businesses,” said President Chuck Parker.
“Universal Distribution is looking forward to working with the Alliance and Diamond UK teams to bring a stronger balance sheet and growth opportunities to retailers and suppliers. Both companies have deep roots in the industry, and we look forward to continuing that into the future,” said Angelo Exarhakos, President and CEO of Universal.
Universal Distribution will be working on the deal for Alliance Game Distributors and Diamond UK. What other assets may need to be sold remains to be seen.
Diamond also released a letter to retailers and comic companies explaining that it has enough capital to continue operations throughout the bankruptcy, but there is no timeline spelled out to when the company plans to exit the bankruptcy.
IMAGE SOURCE: Shutterstock – Comic Books – Sunshine Seeds
