DIAMOND FILES FOR REORGANIZATION UNDER CHAPTER 11 BANKRUPTCY

Diamond Comic Distributors has filed for reorganization under Chapter 11 bankruptcy; Universal Distribution has agreed to acquire Diamond UK and has submitted a stalking horse bid for Alliance Game Distributors. Under Chapter 11 bankruptcy, the company receives protection from its creditors and continues to operate while it attempts to restructure its business.  JP Morgan Chase has agreed to provide up to $41 million in debtor-in-possession financing to support Diamond’s operations during the reorganization period.
The company cited the loss of many of its major publisher clients, post-pandemic declines in sales and increases in costs as reasons for the filing. Diamond and a company associated with Canada-based Universal Distribution have signed a non-binding letter of intent for Universal to acquire Diamond UK.  Universal has also submitted a stalking horse bid for Diamond’s game distribution unit, Alliance Game Distributors, for $39 million.  A stalking horse bid is typically made to set a price floor before an auction for the asset, with the bidder to receive a break-up fee if it does not end up acquiring the asset. 
​Diamond is also in active talks to sell its other operating units, including its core comic, toy, and collectible distribution business; Diamond Book Distributors; Collectible Grading Authority; and Diamond Select Toys. 
Penguin Random House is the company's largest creditor, with many other comic and game companies owed substantial amounts

Posted by Milton Griepp on January 14, 2025

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