Posted in: Ablaze Publishing, AfterShock, Black Mask Studios, Comics, Comics Publishers, Fantagraphics, Image, Oni Press, Titan, Vault | Tagged: ,

Has Image Settled With Diamond Over Plans To Liquidate All The Comics?

Has Image Comics settled with the bankrupt Diamond Comic Distributors over plans to liquidate all their comics?

Published
by
|
Comments

Today and yesterday, I spent most of the day reading Diamond Comic Distributors' Chapter 11 bankruptcy filings. You know the story, or you can catch up with the list of previous stories at the bottom. But Diamond, the biggest distributor in comic book history, went bankrupt, the company sold Diamond to Ad Populum/Sparkle Pop to pay off its debts, but it only went so far. Diamond Comic Distributors Inc., the debtors in the bankruptcy, the bit that Ad Populum didn't buy, still owes JPMorgan Chase millions for the bankruptcy funding. So Diamond has filed to liquidate the millions of dollars of comics, toys, games, and merch that they keep in their warehouses for distribution purposes, but they are still owned by the companies that allowed Diamond to warehouse them. That money would then be used to pay off the banks. Naturally, the publishers in question are not happy with this news at all.

Diamond settles with Image Comics?

In July, Bleeding Cool covered Image Comics filed paperwork against this, which stated "the Motion is a brazen attempt by the Debtors to misappropriate Image's inventory, which Diamond Comic Distributors, Inc… holds as Image's agent. For months the Debtors refused to engage in meaningful discussions with Image regarding return of the Image inventory Diamond holds (or even to provide contractually required reporting of Diamond's postpetition sales of that inventory) on the pretext that Image needed to wait and see…  without warning (and without even first moving to reject the Agreement), the Debtors filed the Motion seeking to sell Image's inventory in a fire sale auction (most likely to Sparkle Pop for pennies on the dollar… and use the proceeds to pay their creditors (presumably the Debtors' pre-petition secured lender turned DIP lender, JPMorgan Chase, since its loan has yet to be fully repaid). This Court should not countenance such flagrant circumvention… and outrageous violation of Diamond's fiduciary duties to Image."

Has Image Settled With Diamond Over Plans To Liquidate All The Comics?
Diamond Image logos

 

They also added "Beginning in 2023 through the middle of 2024, Image directed Diamond to transfer possession of much of the Image inventory then held by Diamond to Lunar. Yet Diamond failed to transfer a large portion of that inventory without explanation. Of the total $2,909,486.23 worth of Image inventory left at Diamond today, $1,231,783.92 (~42%) is inventory that Diamond failed to transfer to Lunar's possession per Image's direction. Diamond wrongfully remains in possession of that inventory."

But in new filings, there seems to have been a change of heart, at least with regard to Image Comics. Diamond has been opposing motions filed by Humanoids, the Ad Hoc Committee of Consignors, the Game Manufacturers Association, the Consignment Group, and Cryptozoic Entertainment, all representing dozens of comic book publishers and game manufacturers, to stop, challenge or delay any such liquidation. And there is a big hearing about it all planned for this Monday, the 18th of August. However, Diamond states that they have "reached a resolution in principle with respect to the objection filed by Image Comics… and therefore do not address Image's objection in this Reply."

So Diamond settled with Image Comics ahead of the hearing, but not the other publishers? It seems that way. What deal did they get?

Banks say wait your turn…

Unsurprisingly, JPMorgan Chase has filed to say that that court should be "overruling each of the Consignment Vendors' Objections to the Consignment Sale Motion and that it "contends that, because the Consignment Vendors failed to file UCC-1 financing statements, they are relegated to the status of general unsecured creditors."

So basically, all the publishers have to accept their stock being liquidated, paying off the banks, and maybe, just maybe, if there's anything left over, settle for that. The publishers would rather have their stock back. However, it seems that the Unsecured Creditors Committee, headed by Titan Books and Simon & Schuster, also oppose the Ad Hoc Committee's attempts to delay any such sale. They may not have stock being held on consignment like the others, and see it as a way to claw back something from the procedures.

Divide and conquer, isn't that the way? The Ad Hoc Committee of Consignors is made up of Ablaze, American Mythology Productions, Avatar Press, Battle Quest Comics, Action Lab, Drawn & Quarterly, Fantagraphics, Green Ronin, Hermes Press, Living the Line, Paizo, Udon and Zenescope, the Game Manufacturers Association made up of Skyscraper Studios, Roll for Combat, and Liminal Esports, aka Snowbright Studio, and the Consignment Group made up of Dynamite Entertainment, Aspen, Black Mask, Dstlry, Heavy Metal, Magnetic, Massive, Oni, Panini UK, Alien Books, Graphic Mundi, Titan and Vault. Two days to go…

Will Diamond's Bankruptcy Process Go After Comic Shop Debt?
Diamond logo

You can use these Diamond tabs to keep up with the latest on Bleeding Cool. Here's a timeline if you want to catch up…

 

Enjoyed this? Please share on social media!

Stay up-to-date and support the site by following Bleeding Cool on Google News today!

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.
twitterfacebookinstagramwebsite
Comments will load 20 seconds after page. Click here to load them now.