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Diamond Comic Distributors Wants To DIP Into Their Loan, Again

Diamond Comic Distributors wants to DIP into their loan, again, as we pore through more bankruptcy paperwork



Article Summary

  • Diamond Comic Distributors seeks more time and cash from its DIP loan to navigate bankruptcy struggles
  • Publishers report delayed payments from Diamond, prompting new communications and rising industry concern
  • Sale of Diamond’s assets has seen dramatic twists, lawsuits, and approval for new ownership transitions
  • Layoffs, service changes, and shifting publisher ties mark Diamond’s uncertain future post-bankruptcy

Last week, Diamond Comic Distributors filed a motion in the United States Bankruptcy Court, regarding their access to a special loan they took to keep their business running during their Chapter 11 bankruptcy process. This loan, called a Debtor-in-Possession (DIP) Credit Agreement from JPMorgan Chase Bank, was for a maximum amount of $5.8 million and was initially due to be repaid on the 30th of June. But subsequent amendments brought that back to the 31st of May. Now they want to push it back again, get more money and more time to pay it back.

Diamond's lawyers argue that changing the loan will keep things running smoothly and point to past court cases, like one with the L.A. Dodgers, where judges let businesses decide what's best as long as it helps the company without giving one group too much power.

If the court says yes, Diamond will have more cash and time to try and finish their bankruptcy process, which could mean more money for creditors, but could also leave them in a deeper hole. Diamond is also trying to hurry the decision along, with a hearing on the 30th of May, just three days away. Diamond still has to help the new owners take over through "transition service agreements" and sell off extra inventory or equipment. With the current loan running out on the 31st of May, Diamond says they need the court to act quickly to approve the loan changes.

This also comes at a time when some publishers have been reporting a lack of payments or delayed payments from Diamond in recent days, which should have been under the DIP scheme. Which is why Diamond issued a new letter to publishers today, which tried to set out what's what, but read very much like it was proportioning blame.

You can use these DiamondAd PopulumPenguin Random House and bankruptcy tags to keep up with the latest on Bleeding Cool. Here's a timeline if you want to catch up…

Will Diamond's Bankruptcy Process Go After Comic Shop Debt?
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Rich JohnstonAbout Rich Johnston

Founder of Bleeding Cool. The longest-serving digital news reporter in the world, since 1992. Author of The Flying Friar, Holed Up, The Avengefuls, Doctor Who: Room With A Deja Vu, The Many Murders Of Miss Cranbourne, Chase Variant. Lives in South-West London, works from The Union Club on Greek Street, shops at Gosh, Piranha and FP. Father of two daughters. Political cartoonist.
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