Posted in: Comics, Current News | Tagged: AENT, bankruptcy, diamond

Diamond Back In Court, Wants To Be Owned By SparklePop, AENT Objects

Diamond is back in bankruptcy court; wants to be owned by Universal/Sparkle Pop, but Alliance (AENT) filed an objection over the timescale

Published Wed, 30 Apr 2025 09:27:25 -0500

by Rich Johnston

Last updated Wed, 30 Apr 2025 09:30:59 -0500

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Article Summary

Diamond Comic Distributors returns to bankruptcy court as ownership shifts after AENT backs out of the deal.
Alliance (AENT) files legal objections and claims creditor status, citing unresolved deposit and insufficient notice.
Universal Distribution and Sparkle Pop now set to buy Diamond assets, aiming for a May 14th closing date.
Unsecured creditors face legal fees topping $1.5 million, deepening the financial turmoil for comic publishers.

Today, Diamond Comic Distributors is back in court, looking at old business with Judge Rice in the Baltimore bankruptcy court, at 10.30am Central time. This session was originally meant to look at the Alliance Entertainment (or AENT) purchase of Diamond Comics. Of course, since that meeting was arranged, this has changed. AENT has pulled out of the purchase and has filed a lawsuit alleging fraud and deception on Diamond's part over the contracts regarding Wizards Of The Coast. A pre-trial conference for that case has been set for the 9th of June.

Also, even though Universal Distribution and Ad Populum were next in line to buy the company, the courts have also filed paperwork for Diamond to move from Chapter 11 bankruptcy proceedings to Chapter 7, which would liquidate the company. That court hearing is in a month's time, but what will happen in today's court hearing may very well influence it.

It may be worth noting that the Unsecured Creditors Committee, being run by Titan Comics, Simon & Schuster and Little Buddy Toys has spent around $1.5 million on legal fees and research at this point. That all has to come out of the pot and would have been enough to pay one hundred unsecured creditor comic book publishers $15,000 each. Just saying.

Further documentation filed today includes a request for an extension of the DIP (Debtor-in-Possession) financing, a specialised form of financing offered to companies facing financial difficulties during bankruptcy. The request will be heard in court today.

More notably is the first confirmation that Diamond are indeed seeking purchase by United Distribution and Ad Populum, and they state that in response to the AENT dropping out Diamond has "promptly pivoted to finalizing updated asset purchase agreements" and have filed a motion to approve sales of Diamond's assets "to the Universal Distribution, LLC, and Sparkle Pop, LLC (an affiliate of Ad Populum, LLC)" and they expect to close on the sale on or before 14th of May 14. So, yes, if this goes ahead, Diamond will be out of bankruptcy, 11 or 7, with Alliance Gaming and Diamond UK owned by Universal Distribution and the rest of Diamond Comic Distribution owned by… Sparkle Pop.

Just now, AENT has filed an objection to the authorisation of the spending up of the sale to Universal and Sparkle Pop. It seems that now, given that their deposit was not returned, AENT is considering itself a creditor of Diamond, and they state that this "is neither reasonable nor sufficient notice to AENT and other creditors."