Posted in: Comics, Current News | Tagged: diamond, Raymond James

Diamond Appointed Investment Banking Firm 3 Months Before Bankruptcy

Diamond Comic Distributors hired an investment banker three months before declaring bankruptcy.

The firm of Raymond James Financial has been hired by Diamond Comic Distributors for the sum of $50,000 a year as the Debtors Investment Banker in Diamond's Chapter 11 bankruptcy dealings. However, even though Chapter 11 proceedings were announced this month, he was hired on the 24th of September last year by Diamond in a different role as its sole and exclusive investment banking advisor. Back then, his duty was to facilitate a sale, a merger, or outside financing for Diamond Comic Distributors, analyzing restructuring alternatives, securing post-petition financing, and managing the sale process for potential buyers, including securing a stalking horse bidder. However, there were also clauses regarding Diamond going bankrupt and the role that the Raymond James firm would play, with his payments guaranteed from available funds.

For the bankruptcy process, the Debtors Investment Banker was appointed as a disinterested party to represent the interests of those to whom Diamond owes money. Raymond James Financial states that it provides global investment banking services, has a dedicated restructuring group, and has experience in numerous high-profile bankruptcy cases.

As well as a $50,000 a month payment for any Financing Transaction agreed upon (including a year after the termination of any contract with Diamond), they have to pay the banker 1.5% of the process of any senior secured debt, 2% of the proceeds of all other debt, and 6% of equity or equity-linked securities raised. And for debtor-in-possession financing, known as "DIP Financing" for a company going through Chapter 11, he is due $150,000. Well, since then, we know that DIP financing was secured to the sum of $41 million from JP Morgan Chase Bank. If Diamond is sold or merged, gets paid $1,250,000, 3.5% of the value up to $35,000,000 and 5% over that, whatever is highest.

The court application from Diamond seeks approval for this arrangement, highlighting Raymond James's extensive experience in advising distressed companies, both in and out of court. A hearing with the debtors for the application to retain Raymond James is scheduled for the 6th of February, with objections due by the 3rd.

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