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Is Diamond to be liquidated over shoddy paperwork? US courts enter paperwork for Chapter 7 bankruptcy as Diamond fail to file.
Posted in: Comics, Current News | Tagged: bankruptcy, diamond
Diamond Comic Distributors To Be Liquidated? Chapter 7 Paperwork Filed
Is Diamond to be liquidated over shoddy paperwork? US courts enter paperwork for Chapter 7 bankruptcy as Diamond fail to file.
Article Summary
- Diamond Comic Distributors faces possible Chapter 7 liquidation after failing to file required paperwork.
- US Bankruptcy Court moves to convert Diamond's Chapter 11 restructuring into asset liquidation proceedings.
- Diamond has not filed any Monthly Operating Reports since starting the bankruptcy case, triggering court action.
- Hearing set for May 27, 2025, unless objections are filed or Diamond submits overdue reports immediately.
The US Bankruptcy courts of Baltimore have issued new paperwork for Diamond Comic Distributors to move it from Chapter 11 bankruptcy to Chapter 7 bankruptcy. In layman's terms, that means attempting to legally reorganise Diamond Comics to be an ongoing company again to liquidating its assets and closing it down for good.
The official reason given in the legal filing is that Diamond hasn't filed their paperwork, specifically their Monthly Reports, during the Chapter 11 procedure. The papers state that " Chapter 11 debtors-in-possession are required to file Monthly Operating Reports with the court and the U.S. Trustee on a monthly basis. The failure to file Monthly Operating Reports constitutes 'cause'… for the conversion or dismissal of this case".
They cite another case stating that "Monthly operating reports "are much more than busy work imposed upon a Chapter 11 debtor for no other reason than to require it to do something. They are "the lifeblood" of Chapter 11, enabling creditors to keep tabs on the debtor's post-petition operations. Failure to file them — and to file them timely — is a serious breach of the debtor's fiduciary obligations and "undermines the Chapter 11 process." It is well established, consequently, that a debtor's failure to submit monthly operating reports is "cause" to convert the case or dismiss it." That "refusal or inability to provide financial disclosure [through monthly operating reports] sounds the death knell of a chapter 11 case" And that Diamond has not filed any Monthly Operating Reports since commencing this case. Monthly Operating Reports for January, February and March are now outstanding and overdue.
A hearing to convert Diamond's Chapter 11 into Chapter 7 bankruptcy at the U.S. Bankruptcy Court in Baltimore, will be held on the 27th of May 2025, unless Diamond Comic Distributors can sort themselves out by then. If no objection is filed by any party within two weeks, the order will be granted without a hearing. Can I suggest that certain people start writing immediately? And maybe Diamond should fill in their bloody monthly reports sharpish?
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