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Diamond Comics Debtors Spent 11 Million On Legal Fees Since Bankruptcy

Diamond Comics Distributors Inc. Chapter 11 bankruptcy debtors spent 11 million on legal fees since the bankruptcy, until the end of September

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Diamond Comic Distributors, Inc., once the dominant force in the North American comics direct market and the debtor in this current bankruptcy proceeding reported just $1.36 million in cash at the end of September and listed zero full-time employees, according to its latest Chapter 11 Monthly Operating Report, filed with the U.S. Bankruptcy Court in Maryland. Diamond entered bankruptcy in January and has now been in proceedings for nine months. Professional fees paid during the Chapter 11 process have totalled over eleven million dollars to date, including almost four million for Raymond James Financial, over three-and-a-half million for Getzler Henrich & Associates, and almost three million for Saul Ewing. Then there's a hundred grand for Special Counsel Stephenson Harwood, and two-thirds of a million to Omni Agent Solutions for administration and paperwork.

Diamond Comics Debtors Spent 13 Million On Legal Fees Since Bankruptcy
Lawsuit screencap

The report, signed by Chief Restructuring Officer Robert Gorin, shows that Diamond Comic Distributors, Inc, the debtor, has a cash balance of $1.4 million, total assets of over eleven million, total liabilities of almost fifty million, giving a negative equity of over $38 million.

Diamond Comics Debtors Spent 13 Million On Legal Fees Since Bankruptcy
Lawsuit screencap

They have also now reported zero full-time employees, down from 478 at the time of the January bankruptcy petition. The filing shows no inventory on the books and no accounts receivable, indicating that major business functions, notably distribution, have been fully divested to Sparkle Pop, Universal Distribution, or Diamond UK, or have been shut down.

The filing notes that the disposition of the much-debated publisher's consigned comic book stock is not reflected in the report. There is a hearing scheduled for tomorrow regarding related matters, as well as the current status of the mediation and negotiation between the debtor, the bank, the publishers and Sparkle Pop. Bleeding Cool will continue to report on the Diamond bankruptcy as it prepares to enter its second year.

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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 comic books The Flying Friar, Holed Up, The Avengefuls, Doctor Who: Room With A Deja Vu, The Many Murders Of Miss Cranbourne and Chase Variant. Lives in South-West London, works from The Union Club on Greek Street, shops at Gosh, Piranha and Forbidden Planet. Father of two daughters, Amazon associate, political cartoonist.
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