Bankruptcy Court Approves Back-Up Bid to Purchase Diamond Comic Distributors

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In just under a week following Alliance Entertainment’s surprising move that sent shockwaves through the comic book community, the Baltimore Bankruptcy Court has given its approval for Diamond Comic Distributors to be sold to its secondary bidders: Universal Distribution (a Canadian firm) and Ad Populum (the umbrella company of NECA and WizKids). This sale now moves forward as…

Universal is set to take over the resources of Alliance Game Distributors, while Ad Populum will acquire the resources of Diamond Comic Distributors, Diamond Book Distributors, Diamond Select Toys & Collectibles, Collectible Grading Authority, and related assets in a separate deal. Additionally, Universal will purchase Diamond UK in a distinct transaction. The bankruptcy protection for Diamond will remain active until the sale is finalized.

* Universal gets Alliance Game Distributors’ assets.
* Ad Populum gets Diamond Comic Distributors, Diamond Book Distributors, Diamond Select Toys & Collectibles, Collectible Grading Authority, and other related assets.
* Both deals also include the acquisition of Diamond UK by Universal (in a separate transaction).
* The bankruptcy protection for Diamond will continue until the sale is completed.

What happened to Alliance Entertainment’s bid?

In a surprising turn of events, Alliance Entertainment emerged as the highest bidder for Diamond, but Diamond attempted to seek court approval to accept the second-highest bid – a joint proposal from Universal and Ad Populum. However, the courts declined Diamond’s request to consider the alternative offer, upholding Alliance’s winning bid instead. Remarkably, Alliance later chose to abandon the acquisition, leaving Diamond in an uncertain position.

Alliance decided to take legal action against Diamond, arguing that Diamond had dishonestly misrepresented itself by failing to disclose that Wizards of the Coast intended to end its distribution agreement with Diamond’s Alliance Game Distributors, which was set to expire on April 30, until eight days prior to the sale to Alliance. It is important to note that Wizards of the Coast accounted for about 25% of the sales made by Alliance Game Distributors.

In the newly signed contract, Ad Populum will end up paying a reduced amount compared to their initial bid, while Universal will stick to the terms of their original offer.

What was the other drama with Diamond recently?

Lately, it emerged that Diamond had failed to submit the Monthly Operating Reports necessary for Chapter 11 proceedings. Consequently, the court-appointed trustee suggested a shift to Chapter 7 status, which implies liquidation of the company. Yet, Diamond consented to complete these reports, and it seems this matter won’t cause any further complications.

In a statement, Joel Weinshanker, Managing Director of Ad Populum, shared his enthusiasm: “From my childhood memories, I can still picture stepping into my local store and seeing those distinctive Diamond Comic boxes. Each one held visions of the future for me. We’re eagerly looking forward to carrying on Diamond’s exceptional heritage by incorporating our top-tier sales, marketing, and distribution services into this new chapter.

Universal Distribution’s President and CEO, Angelo Exarhakos, stated, “Our U.S. market entry via the acquisition of Alliance Game Distributors signifies a crucial milestone for our company. We are dedicated to fostering robust, transparent relationships and ensuring that Alliance remains a dependable and robust connection within the supply chain.

In the upcoming proceedings, Steve Geppi – the man behind Diamond Comic Distributors – will retain certain holdings, specifically Gemstone Publishing among them.

The legal dispute between Alliance and Diamond continues unabated, with no official resolution yet in sight. This situation might still take some unexpected turns before it comes to a close.

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2025-05-01 00:44