Posted in: Comics, Current News | Tagged: Ad Populum, AENT, diamond

Competing Lawsuits Reveal Diamond Bankruptcy Timeline Began In July

Competing lawsuits between Ad Populum and Alliance Entertainment reveal the Diamond Comics Distributors bankruptcy timeline began last July

Published Tue, 10 Jun 2025 11:58:03 -0500

by Rich Johnston

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With Alliance Entertainment (AED) suing Diamond/Ad Populum over allegations of fraud, and Diamond/Ad Populum suing AENT for allegations of breaking confidentiality and poaching staff, we have borne witness to some of the inner machinations of both parties. And have been able to create a timeline, including the allegations each side made. AE is Alliance Entertainment, AD is Ad Populum, and BC is Bleeding Cool. The times stated are Pacific. Keep in mind that most of these details are the assertions of the two parties in their respective lawsuits, but once you put all of that available information onto a timeline, a few events slot into place. Such as Diamond planning for bankruptcy six months before it happened, something lots of publishers might like to have known. Or why Mike Schimmel resigned on the day that he did, why was it Joe Lunday who was contacting Amazon, and why Bruce Ogilvie went on the Beyond Wednesdays podcast on that day of all days. But be warned, we go long…

Diamond's New Owner Ad Populum Sues Alliance Entertainment (AENT) — Alliance, Ad Populum and Diamond logos

12th July 2024

AE: Diamond hires Getzler Henrich to provide restructuring services and Chapter 11 planning and execution services. Robert Gorin hired as Chief Restructuring Officer.

30th September 2024

AD/AE: Diamond Comics hired an investment banker, Raymond James to find potential partners interested in purchasing the company's assets.
AD: Raymond James contacts over 110 prospective purchasers, including Alliance Entertainment (AENT), Ad Populum, Sparkle Pop, and Universal Distribution. Raymond James required all interested prospective purchasers to sign a non-disclosure and non-solicitation agreement with Diamond Comics

October 2024

AD: AENT requested and received access to "Evaluation Material," defined as including information relating to Diamond "which is non-public, confidential or proprietary in nature, from officers, directors, employees or agents of the Company" and that it would return or destroy all copies of that information if a transaction was not consummated. Alliance agreed that for a period to two years, it "shall not solicit for employment or, directly or indirectly, hire any employee of the Company"
AD: AENT signs the NDA

26th October

AD: Ad Populum, the parent company of Sparkle Pop, signs the NDA

December 2024

AE: Wizards Of The Coast terminates its distribution agreement with Diamond, ending on the 31st of December.

1st January 2025

AE: Wizards Of The Coast signs the Second Amendment extending the distribution relationship by 90 days, to March 31, 2025.

13th January

AD: Diamond Comics executed an asset purchase agreement with Universal as a "stalking horse bid" for the bankruptcy process.

14th of January

AD/AE: Diamond Comics filed a petition for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for
The District of Maryland

11th of February

AD/AE: Bankruptcy Court entered a Bid Procedures Order authorising an auction of Diamond Comics' assets to the highest bidder.

1st of March

AE: AENT asked Raymond James and Getzler Henrich about current customer and vendor relationships across all of the Debtors' businesses, without specific answers.

2nd of March

BC: Everyone goes to Toy Fair, hotels, ferries, Uber, breakfasts and lunch.

6th of March

AE: AENT executive employees video conference with Diamond, Getzler Henrich, Raymond James to ask about status of the Debtors' relationships with their key vendors. They were told relationship with key vendors were strong and stable. They state Raymond James and Gorin prevented Debtors from answering specifics of Wizards Of The Coast and others.

12th of March

AE: WOTC Third Amendment was signed by Diamond, extending distribution until the 30th of April.

16th of March

AE: Diamond uploaded redacted contracts with certain large vendors, including a Distributor Agreement, effective December 8, 2021, by and between WOTC and Alliance Game Distributors, and a second amendment, effective as of January 1, 2025. Expiration dates of the Distribution Agreement and Second Amendment were redacted.
AD: Sparkle Pop submitted a joint bid proposal with Universal.
AE: Alliance Entertainment makes a bid for $51,559,450 and sends a deposit of $3,600,000

18th of March

I go on the Beyond Wednesdays podcast to talk about the whole bankruptcy thing.

21st of March

Raymond James notified AENT that it was conditionally approved as a Qualified Bidder, but that AENT's asset purchase agreement did not meet certain requirements and could not be approved.

23rd of March

After extensive discussions and revisions to AENT's bid, Diamond notified AENT that it was a Qualified Bidder.

24th of March

BC: Auction held at Raymond James' New York offices. It goes late. People get pizza, ferries, taxis and hotels.

25th of March

AD/AE: Auction held. It is concluded. AENT's bid is for $72,245,000. Raymond James declared AENT the winning bidder and the Sparkle/Universal group the back-up bidder. AENT sends an additional deposit of $4,900,000.
AD: Drafts of asset purchase agreements between AENT and Diamond. Ad Populum claims "AENT insisted on including language that was inconsistent with the agreement placed on record at the auction."
AE: AENT claims Diamond has been soliciting new bids and secretly negotiating with their preferred purchaser, a combination of Universal/Ad Populum/Sparkle Pop.
AD: Diamond Comics proceeded to seek approval to sell its assets to the Sparkle/Universal group.
AE: AENT requested an opportunity to communicate directly with Diamond's customers and vendors to confirm the status of each of those relationships. Raymond James denies the request.
BC: Bruce Ogilvie, CEO of AENT, goes on the Beyond Wednesdays podcast instead after seeing my performance the week before.

Late March

BC: Lowenstein Sandler billed for listening to and reviewing the podcast. William Henrich bills for meeting with Saul Ewing and Getzler Henrich, which included "management/employee reaction to auction results" and the "winning bidder executive podcast notice and winning bidder communication protocol." And for talking to Robert Gorin on "winning bidder podcast content, potential implications, and coordination of meeting of advisors to discuss ramifications." Then withRaymond James, Saul Ewing and Getzler Henrich on the "winning bidder podcast content, potential implications, and next steps"

31st of March

BC: William Henrich meeting with Saul Ewing and Getzler Henrich, "notification of winning bidder unapproved customer conversation" and "additional information concerning winning bidder unapproved customer conversation and formulation of communication related thereto".

1st of April

AE: WOTC Third Amendment was signed by WOTC, extending distribution until the 30th of April.

6th of April

AD/AE: AENT filed an adversary complaint against Diamond Comics for preliminary injunction to stop the sale to Universal/Ad Populum and seeking to be reinstated as the winning bidder.
AD: The Bankruptcy Court accepted AENT's position. AENT executed an asset purchase agreement with Diamond Comic with a closing date of April 25, 2025.

9th of April

AE: AENT meet Diamond, Tyson, Hirsch, and Gorin, inquired as to the status of vendor relationships, including WOTC. State they were strong and stable and that remained in good standing with them.
AD: Ad Populum claims "Alliance used its position as the winning bidder to bully Diamond Comic into making further concessions. Furthermore, Alliance abused the bidding process to obstruct the joint bid of Sparkle Pop and Universal, who genuinely intended to purchase the Diamond Comic assets for fair market value. Alliance's conduct delayed that process, imposing unnecessary costs on Sparkle Pop, Universal, and Diamond Comic. The bidding process also allowed Alliance to obtain key confidential information and trade secrets from Diamond Comic, which it then abused to effectively usurp critical company assets without paying for them.

10th of April

AE: AENT executed the purchase agreement, which totals $85,368,053, with $61,613,309 in cash due at closing.

11th of April

AE: The Court entered the Sale Approval Order.

12th of April

AE: Unredacted versions of the Distribution Agreement and Second Amendment have been made available.

15th of April

AE: WOTC invite AENT to a conference between them and Diamond to discuss the relationship, for the 17th April, at noon.

17th of April

AE: 11:49am WOTC cancelled the conference without explanation.
AE: 4:36pm, Diamond lawyers call AENT lawyers and say the WOTC Distribution Agreement was set to expire on 30th of April and WOTC had communicated that they did not intend to renew the agreement. AENT asked to not raise this issue at the 5pm daily all-hands conference call.
AE: 10:15pm, AENT met with the Diamond and Gorin to discuss the status of the WOTC relationship. They state that Gorin said WOTC gave no prior indications that the Distribution Agreement was in jeopardy. But that it had been extended from March 31, 2025 to April 30, but provided no evidence of such extension. Agreed to reconvene on the 18th of April

18th of April

AE: AENT meets Diamond, Gorin, Tyson, and Hirsch by video conference to discuss the WOTC relationship. Tyson and Hirsch reiterated Gorin's previous assertions that WOTC gave no prior indications that the Distribution Agreement was in jeopardy. WOTC stated it was only granting 90-day extensions to all of its distributors.

21st April

AE: 2pm conference call with AENT and Diamond, Gorin, Hirsch, Tyson, WOTC President John Hight, WOTC VO Brian Trunk. AENT states that WOTC refuted the Debtors' and Defendant Gorin's previous assertions that its decision to terminate the Distribution Agreement was only made on April 17, 2025. WOTC made its decision to terminate the Distribution Agreement in December 2024. The decision was made because Diamond's business with WOTC had declined by more than 8% over the last four years, while each of WOTC's other distributors had significantly increased their sales. Extensions were an accommodation to assist Diamond in their upcoming bankruptcy case and to grant WOTC critical vendor status.

22nd April

AE: 12:46am, AENT submitted a proposed agreement to WOTC whereby AENT would pay WOTC a fixed sum and agree to minimum purchase commitments, in exchange for WOTC extending the Distribution Agreement through December 31, 2025.
AE: 8:02pm WOTC rejected the proposal by email, confirmed the Distribution Agreement would expire on April 30th.
AE: 8:07pm AENT's financial advisor and Raymond James conferred, conceded that the loss of the WOTC revenue warranted a downward adjustment of the AENT APA purchase price in the range of $14-$16 million. AENT's financial advisor said $18-$25 million.

23rd of April

AE: 11am, AENT met with the Diamond, Getzler Henrich, Raymond James, and Council to discuss the impact. Diamond refused to engage. AENT discussed delaying closing by one week to allow downward adjustment of the purchase price. Accounts payable had increased $16 million. Agreed to reconvene at 3.30 pm
AE: 12.17pm, Diamond said they would not be ready by 3:30 P.M.
AE: 5:30 pm, Diamond still not prepared to engage in discussions, but agreed to have a discussion at 7pm
AE: 6.56pm Diamond cancelled meeting over conflicts on unrelated matters.
AE: 8.30pm AENT's counsel sent a "Notice of Material Adverse Change." Without resolution, AENT would terminate on the 24th April, 2025.

24th of April

AE: 10:34 am Gorin emailed AENT's financial advisor to set up a conference call with Getzler Henrich and Raymond James, but without AENT's principals and Diamond or AENT's counsel. AENT's financial advisor agreed and asked for a time, but got no response
AD/AE: 4.57pm. AENT terminated its asset purchase agreement, refusing to proceed and close. AENT claims due to the occurrence of a Material Adverse Change, specifically, that the WOTC contract representing 25% of Alliance Gaming Business revenue would terminate on the 30th of April. That the breach was incurable, the condition precedent of No Material Adverse Change had not been satisfied, and that Diamond fraudulently induced AENT to execute the purchase plan.
AE: 8:14 pm AENT emailed Diamond with written instructions for the release of the deposit of $8.5 million, to no response.

27th of April

AD: Sparkle Pop and Universal stepped in, executed their own asset purchase agreement

28th of April

BC: Bankruptcy courts threaten to switch from Chapter 11 to Chapter 7 bankruptcy over unfiled legal documents.

29th of April

BC: AENT sue Diamond for fraud, alleging they withheld information about their Wizards of the Coast contract.

30th of April

BC: Bankruptcy court approves sale of Diamond to Universal/Ad Populum

15th of May

AD: Sparkle Pop executed a Transition Services Agreement with Diamond Comics, and agreed to keep business critical personnel and processes running "as is" during the transition period such as providing access to personnel and systems and to safeguard its confidential information, stating it was "because of the value it placed on the Diamond Comic assets, including its proprietary business knowledge, established relationships, experienced and knowledgeable employees, and trade secrets."
AD: Universal also executed an asset purchase agreement for the Diamond Comic assets not included in the Sparkle Pop purchase agreement, namely Alliance Gaming and Diamond UK
AD: Bankruptcy Court approved the Sparkle/Universal proposal

16th of May

BC: Universal/Ad Populum officially buys Diamond Comic Distributors
BC: Diamond layoffs begin including VP Sales and Business Development Rich Johnson, Sales Manager Stuart Carter, Associate Director of Online Sales Terri Helman, Chief Relationship Officer Chris Powell, and Assistant Manager Steve Leaf.
BC: Diamond Select Toys shuts down.
AD: Mike Schimmel, Vice President of Sales at Diamond Comic Distributors, at Diamond for 21 years, and Capital City Distribution for over three years before that, resigns.

21st of May

BC: Penguin Random House pulls all third-party subdistribution by Diamond of Marvel, Dark Horse, IDW, Boom, etc., except Diamond UK.

23rd of May

AD: Six other key employees in the sales and purchasing departments of Diamond Comics gave one week's notice. Matthew Demory, who had been at Diamond for thirteen years, moving from Comics Brand Manager to Print team Assistant Manager.
Joe Lunday, Director of E-commerce Sales at Diamond, and had been at Diamond since 1998 with a brief 8-month sojourn at Amazon in 2022.
Ryan Shelkett, two years as Executive Director of Vendor Development at Diamond, seven years at Bandai, and another ten years at Diamond as a National Sales Manager.
Lee Butman, over twenty-five years at Diamond, as Merchandise Purchasing Manager, and Toys Brand Manager before that.
Trista Peterson, National and Outreach Sales Manager at Diamond since 2023.
Brennan West, Diamond Purchasing Brand Manager, at Diamond since 2017.

28th of May

BC: Courts withdraw threat of Chapter 7 bankruptcy

30th of May

AD: During exit interviews, Diamond Comics reminds departing employees of their continuing confidentiality obligations. Several of the departing employees noted in their exit interviews that Alliance had reached out to them with offers for employment.
AD: Joe Lunday, Director of E-commerce Sales at Diamond, and former Amazon employee, reached out to his Amazon representative to say he would staying in the same industry as Diamond Comics at his next job at Alliance; he would be working at Alliance in a similar role as his role at Diamond; Alliance would be looking to build out their collectible program; all Diamond Comic employees were jumping ship; and going forward, Amazon should buy the items they had been buying from Diamond Comic from Alliance instead.

1st of June

BC: Diamond gets extended funding and financing for Chapter 11 proceedings

2nd of June

BC: Seven former Diamond employees announced they are at AENT in new senior roles.
Mike Schimmel is now Senior Vice President of Sales, Matthew Demory is Product Manager/Buyer, Joe Lunday,is now Director of Collectible Sales, Ryan Shelkett, is now Vice President of Purchasing. Lee Butman, is now Product Manager/Buyer. Trista Peterson is now Collectables Sales Director Brennan West, is now Product Manager.

4th of June