One of the oldest distributors of comics has filed for Chapter 11 bankruptcy. Tuesday morning, Diamond Comic Distributors filed a voluntary petition for relief under Chapter 11 in order to help facilitate the restructuring of its business. Chapter 11 falls under the United States Bankruptcy Code and is typically used to reorganize the company’s debt and business. As part of the filing, Universal is looking to acquire Diamond UK and has a stalking horse bid for Alliance Game Distributors, which all means more changes to the evolving comic book landscape behind the scenes.
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“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.
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“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.
Other information to come out of Diamond Comic Distributors’ Chapter 11 filing is that it received a $39 millionstalking horse bid for Alliance Game Distributors from an affiliate of Universal Distribution. Also, Diamond received commitments of up to $41 million in debtor-in-possession (DIP) financing from JP Morgan Chase to fund post-petition operating expenses and ensure adequate working capital to meet its obligations to associates and suppliers.
Diamond entered 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.
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How all this shakes out for the comic book consumer remains to be seen. There has been a rash of delays for comic book shipments the last month with the holidays and weather affecting comics making it to stores weekly. In response, publishers have had to push back release dates of these comics. Diamond has lost market share to Lunar Distribution and Penguin Random House with the Big 2 of Marvel and DC moving their business elsewhere.
