According to unsealed court reports, Diamond Comic Distributors was already looking for a buyer back in 2023
Thanks to the US Bankruptcy courts unsealing transcripts, we have been looking at previous courtroom activity over the Diamond Comic Distributors Chapter 11 bankruptcy process. That includes a blow-by-blow take on the bankruptcy timeline by Mark Minuti from the legal firm Saul Ewing, representing Diamond Comic Distributors, the debtors of the Chapter 11 bankruptcy. And they put the blame solely and squarely on the shoulders of DC and Marvel Comics. And the bankruptcy planning goes back even earlier than we thought, to 2023. Back on the 15th of January, 2025, Mark Minuti told the court, with our own emphasis;
“Since 2019, particularly during and after the COVID-19 pandemic, the Debtors have faced a decline in comic book and graphic novel sales through DCD’s Diamond division, primarily due to the loss of Exclusive Distribution Agreements with major suppliers like DC Entertainment and Marvel Worldwide. Additionally, macroeconomic challenges, including higher interest rates on secured debt and inflationary increases in wages and freight-related expenses, have further strained the Debtors’ operations. Although the Alliance Division saw revenue growth from $85.5 million in 2020 to $149.1 million in 2023, this was insufficient to sustain the overall business. Rising operating expenses, which increased from 5.44% of sales in 2019 to 8.73% in 2023, compounded by inflation and wage pressures, have led to an unsustainable liquidity position for the Debtors.
“To address these challenges, the Debtors took proactive steps starting in 2023 to stabilize their financial situation. They initiated a process to find a buyer for all or part of their business but were unable to secure a transaction in 2023 or early 2024 due to structural issues. In March 2024, the Debtors retained Getzler Henrich as their Financial Advisor, later appointing Mr. Gorin as Co-CRO of DCD. Recognizing the potential need for a distressed sale, the Debtors engaged restructuring counsel to explore strategic alternatives, including a possible Chapter 11 filing, and hired Raymond James & Associates, Inc. as their investment banker to manage a marketing process in a distress scenario.”
“The Debtors’ boards for DCD and DST each appointed an independent Restructuring Committee, consisting of one independent director responsible for decisions related to a potential Chapter 11 filing. After evaluating options, the Debtors determined that pursuing a going concern sale within a Chapter 11 process was the best path to preserve and maximize value for stakeholders. In late September 2023, Raymond James initiated a marketing process, developing materials like a teaser and a Confidential Information Memorandum (CIM), setting up a virtual data room, and contacting over 110 parties, 28 of whom signed Nondisclosure Agreements to access the CIM. Six parties submitted indications of interest, and after arm’s-length negotiations, the Debtors signed an Asset Purchase Agreement with Universal Distributors, Inc. as the Stalking Horse Purchaser for a 363 sale, subject to Court approval.”
“The Debtors filed for bankruptcy with the goal of conducting a competitive postpetition sale process to maximize asset value for creditors and stakeholders, with Universal as the Stalking Horse Bidder. Raymond James plans to launch the postpetition marketing process promptly, supported by a Sale Motion and a Motion to Establish Bidding Procedures. Significant prepetition interest, combined with postpetition inquiries following the first day affidavits, suggests a robust and competitive sale process is expected.”
That’s what they got. Until it all went wrong, that is…
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