The story of the Diamond bankruptcy, financial woes and break-up is exhausting. The big shocking reveal came on Thursday when it was disclosed that Alliance had won the bankruptcy auction. The actual announcement came on Friday in the blockbuster filing that includes the APA (asset purchase agreement). As part of that agreement, Alliance has dropped their lawsuit.
ICv2 did a deep dive on this, and as always Milton Griepp’s reporting is the best on this matter. You should read the whole thing (instead of the 80+ pages of the contract) as it does into some detail on what the cure amounts (the money needed to bring a contract back to current) are on some of the biggest creditors. Some highlights: the purchase price for Alliance Game Distributors is “$36,865,000, less $6,770,735 (the defined amount for Average Net Working Capital), plus 90% of the value of Alliance’s closing inventory, and 90% of the value of Alliance’s accounts receivable aged less than 90 days.”
That covers games, but what about the comics?
The remaining assets, listed as Lot B (which presumably includes comic distribution, Diamond Select, and CGA) will be purchased for $21 million, less cure amounts paid to creditors whose contracts are being assigned, and plus Incentive Amounts, based on the value of inventory sold and accounts receivable collected of the Lot B entities by the end of 2025. The Incentive Amount will be the greater of $5 million or an amount calculated based on what Alliance Entertainment collects of the receivables of the Lot B entities, and on what Alliance Entertainment sells of the inventory of the Lot B entities.
Assigned contracts and cure amounts related to the comic distribution business include Viz Media, LLC ($268,308), Spin Master ($93,688), Comic-Con ($0), and a handful of others; there are also a number of Diamond Select contracts being assigned with smaller cure amounts.
What money will be left to pay creditors is subject to a lot of fees – a filing yesterday enumerated $800,000 in expenses for Getzler Henrich & Associates LLC, the company overseeing the restructuring, and that’s only up through February 28th. Going bankrupt is an expensive thing and leaves less money for the creditors.
As noted at Graphic Policy, Diamond is getting loaned $3 million more from Chase to keep operating until the closing takes place on April 25th.
Where does this leave Free Comic Book Day and Diamond UK? As Diamond is still doing business as normal, it seems likely that FCBD will go on somewhat as planned. The fate of Diamond UK is something we’re still investigating.
One thing has become clear from talking to many folks about this over the last few days and weeks: both publishers and shops had already been moving away from Diamond, so while there will be an impact, it is not a catastrophic impact. Yet. We’ll see how the smaller companies that made up Diamond’s main business over the last year or so survive this. As exhausting as this has all been there will be a lot more to come.
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