Diamond Files For Chapter 11 Bankruptcy
by Erik Amaya
Diamond Comics Distributors Inc., is in financial trouble.
That has been true for sometime with local comic books shops complaining of late shipments, publishers finding alternate distribution arrangements over the last five years, and recent rumors of increased difficulties in the last few months. And now, per Businesswire, the company has filed for Chapter 11 Bankruptcy. The filing is an attempt to reorganize the company’s debts, but it will also restructure the business along the way. Indeed, the filing comes with the suggestions that parts of Diamond’s operation will be sold off to other companies with Diamond also actively looking for a buyer (or buyers) for other aspects of the organization, including Diamond Select Toys, the card grading service, and the comics distribution apparatus itself.
Diamond UK, meanwhile, may be quickly sold to Universal Distribution per a “non-binding letter of intent” included in the filing. The latter company is also committed to buy Alliance Game Distributors from Diamond.
According to the article, Diamond already has “received commitments for up to $41 million in debtor-in-possession (DIP) financing from JP Morgan Chase that will be used to fund post-petition operating expenses and ensure adequate working capital to meet its obligations to associates and suppliers.” Presumably, this means people owed money will get paid.
Diamond president Chuck Barker also sent out a letter to retailers (subsequently made available on social media) to clarify the decision to file was a “necessary” one. He added that the commitments already in place with Chase and Universal means the company is “continuing business as usual throughout this process.”
In operation for over 40 years, Diamond emerged in the late 1990s as the comic book distributor following Marvel’s purchase of their own distribution system which forced additional consolidation just as the decade’s comic boom turned to a bust. In 2020, the brief pause in shipments during the early part of the COVID-19 pandemic lockdowns saw companies like DC Comics find alternate distributors. This began a wave of other companies returning to the market to carve bigger slices out of Diamond’s share, increasing pressure on the distributor with each announcement of a publisher going non-exclusive.
This is a story that has been developing for some time and will continue to develop in the months ahead. But for the moment, new comics will still arrive tomorrow at least some stores.
