There were many developments yesterday in the Diamond Bankruptcy case, but honestly, we’re so exhausted from covering them that this digest will have to cover the latest, Of course, should more bombshells drop we’re standing by.
§ One bombshell is taking place as you read this, a 10:30 hearing that was SUPPOSED to approve the Alliance Entertainment (AENT) purchase of substantially all of Diamond assets. Given all that has transpired, other matters may be covered.
§ Following all of Monday’s bombshell revelations – the court trustee filing a motion to liquidate Diamond under Chapter 7, and AENT suing Diamond over WotC subterfuge, Diamond sent an email to retailers apologizing and saying they were going to file some urgently needed paperwork after all.
Dear Diamond Customer:
You may have read or heard that the United States Trustee’s office recently filed a request to convert Diamond’s bankruptcy cases. This request was made due to Diamond’s unfortunate, but unavoidable, delays in filing certain reporting information with the Court.
Diamond is in the process of finalizing the reporting information and will do so over the next few days. Once this has happened, we fully expect that the United States Trustee will withdraw its request.
We greatly regret any concerns these circumstances may have caused.
§ Brett Schenker emerged with the biggest news much later in the day: a motion from Diamond to authorize the sale of substantially all of their assets to Universal Distribution and Sparkle Pop/Ad Populum, mostly as previously reported, but with a few changes. The biggest change: the purchase price is lower than it was before.
Universal will purchase Alliance Distribution (minus WotC we now know, but Pokémon is also getting special handling as revealed in this filing) for $42 million. Ad Populum, now styled as Sparkle Pop LLC, will purchase Diamond Comics Distributors, CGA, and Diamond Select Toys for $7,459,050. Diamond UK will seemingly go to Universal, but under a separate deal. We’ll circle back to that.
This combined bid, just a shade under $50 million, is less than the previous $69 million combined bid which included $49,634,950 from Universal for Diamond UK and Alliance Games Distributions, and $19,495,050 from Sparkle Pop/Ad Populum for Diamond Comics Distributors, CGA and Diamond Select Toys.
And if you’re wondering who Universal and Ad Populum are, they are, in the words of chief restructuring officer Robert Gorin, “alternative, exceptionally well-known purchasers who are excited to partner with us. These companies have strong balance sheets and, importantly, unmatched presence and experience in our core industries.”
Sparkle Pop was mentioned in the last time Diamond tried to sell their assets to this combined bid – it appears to be a holding company formed by Ad Populum owner Joel Weinshanker for the purpose of this purchase. Weinshanker’s other businesses include NECA Toys, Rubies Costumes, Enesco, Party City, WizKids, and running the estate of Elvis Presley. This deal is seemingly being structured through Sparkle Pop to keep the books separate.
I have not had time (or energy) to go over the 200+ pages of this latest APA filing, so here’s Schenker’s summary:
Diamond is now looking for the court’s approval of this move. It seems like the purchase amount from Universal is now $42 million minus the “Average Net Working Capital,” plus the “Inventory acquired on the Closing Date,” plus the “Accounts Receivables acquired on the Closing Date,” minus “accounts payable due to Critical Vendors on the Closing Date,” and minus “any amounts paid by Purchaser as Cure Amounts and the assumption by Purchaser of the Assumed Liabilities.” So… math.
The purchase price by Ad Populum/Sparkle Pop LLC is “$7,459,050 U.S. Dollars, less any Critical Vendor payment owed by Sellers under the Asset Purchase Agreement submitted by Universal and any amounts owed by Sellers to NECA, LLC, Wizkids/NECA, LLC or to its Affiliates, but solely to the extent such payment is not made by or on behalf of Universal (the “Base Purchase Price”), (ii) plus, the Incentive Amount, if any; (iii) minus, accounts payable due to Critical Vendors on the Closing Date; and (iv) minus, any amounts paid by purchaser as Cure Amounts with respect to the Acquired Business, excluding Cure Amounts in connection with Additional Assigned Contracts (collectively, the “Purchase Price”), and the assumption by Purchaser of the Assumed Liabilities.”
§ As for Diamond UK, Universal had previously put in a bid on this business, all the way back in January (!) when they signed a non-binding letter of intent to purchase Diamond UK. That agreement will form the basis of a separate agreement, if I’m reading this document correctly.
I should note here that Diamond UK has been a particularly puzzling part of this whole mess, and something I haven’t covered in much depth. Unlike the US version of Diamond, the UK edition carries Marvel, DC, Image and all the comic book players, and is actually profitable. I’m not going to do a deep dive on its history here because it is long and tangled, but suffice to say its roots go back to the 90s multi-distributor wars, and was acquired by Diamond when they bought out Titan Distribution. Its place in the Diamond family of businesses was also a bit odd, as it was co-owned by two separate holding companies, Comic Exporter, Inc. and Comic Holdings, Inc. which each owned 50% of the company. Trying to untangle this led me to open so many windows that it nearly crashed my browser so I’m going to leave it at that for now except to say, Alliance pointedly didn’t include Diamond UK in its scuppered APA, suggesting that Universal has always been set to acquire it.
§ So where does this leave us? With all the crazy twists this case has taken, I’m loathe to make any guesses, but it does seem that Diamond always wanted Universal to buy it, and Universal always wanted to acquire Alliance Games and Diamond UK – they fit in quite well with their existing toy, game, comic and magazine distribution business, and as a Canadian company they don’t even have to worry about US tariffs on China (in theory).
§ As for Diamond’s comics business…the brutal truth is that there wasn’t much left to it. I’ve talked to many, many, many people since January 14th, 2025, publishers, retailers, creators, distributors, toy makers, and they all say they will survive Diamond’s bankruptcy. They saw the handwriting on the wall, and had been making other plans already. There will of course be pain points, and some small publishers are going to go out of business or radically change their business models, but I will examine that in a future piece.
§ Free Comic Book Day has also not been mentioned as an asset in this maelstrom. It will take place this Saturday, May 3rd, as usual, but many feel it will be the last FCBD, at least in its current form. Again, a topic that deserves its own analysis.
§ Finally, I would like to say that I make some humorous comments in my coverage to break up the legalese, but I am keenly aware that Diamond is made of people, and I’m pretty sure that some people at Diamond read my coverage, and I never want to make light of the human costs of this. A sharp reminder of this came in a comment on my story about the AENT suit yesterday, written by a Diamond employee. It seems worth quoting at length here:
Diamond was supposed to have an all-hands town hall yesterday afternoon. Chuck Parker cancelled it about an hour before it was to begin. “Thank you for your continued patience,” his email concluded.
Patience has worn thin, Chuck.
This is a company full of anxious, nervous, terrified employees who are finding out through the comics media what’s happening with their company and their futures and not from you and the company. The news about the filing to convert to Chapter 7 and liquidate the company broke before the workday ended yesterday. It wasn’t addressed officially until an email at 11:22 last night. The clock is running on an official acknowledgement of this new Alliance lawsuit. I am not holding my breath. The first time anything official was said about the purchase after the auction was a vague email that went out when Diamond made the move to go with the backup bidders.
There’s a lack of leadership. There’s a lack of communication. There’s a lack of candor. It’s appalling and it’s disrespectful.
Were I a cynic, I would think that all the positive and hopeful vibes we’ve had since January, especially from Robert Gorin, were aimed at one thing and one thing only–to keep valuable, irreplaceable employees from jumping ship as Diamond sinks beneath the waves. Give them a morsel of hope, paint a rosy picture of the bankruptcy process, keep them distracted, run out the clock.
Anyone at Diamond who has vacation or sick leave banked at this point should burn it. Just call out sick every day until this stupid drama ends. Prioritize your mental health. So what if the work doesn’t get done? It’s not our problem.
This is the way Diamond ends–playing stupid games.
As ludicrous and dramatic as these events have been, please keep the people who work at Diamond, Alliance, CGA and the rest in your thoughts. Covering this story (I hope) fairly and accurately has been taxing for me as a journalist; I can’t imagine what it would be like to live it as your day to day job.
