In a major twist in the bankruptcy of Diamond Comics Distributors, Alliance Entertainment, the company that won the initial bidding for Diamond Comic Distributors in its Chapter 11 bankruptcy auction, has decided to terminate its purchase agreement. Alliance did not give any reason for its cancellation of the agreement.
The cancellation is ironic given that Diamond recently tried to accept a different bid instead of Alliance's winning auction bid. Diamond tried to go with the runner-up bid, a joint bid by Universal Distribution, LLC, and Ad Populum, LLC (the parent company of NECA and WizKids). Alliance actually went to court to force Diamond to accept its bid, and it won. Now, just two weeks later, Alliance has reversed course and has canceled its purchase.
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What did Alliance file with the SEC?
In its filing with the U.S. Securities and Exchange Commission (SEC), Alliance wrote, “On April 24, 2025, the Company sent a Notice of Termination to Diamond Comic Distributors, Inc. ("Diamond”), terminating the previously executed Asset Purchase Agreement to acquire substantially all of the assets of Diamond through a court-supervised bankruptcy process. The termination was effective immediately.”
Alliance's purchase included Diamond Comics Distributions' various assets, like Alliance Game Distributors and Diamond Select Toys, but pointedly did NOT include Diamond UK. The bid from Universal Distribution, LLC, and Ad Populum, LLC, on the other hand, DID include the purchase of DIamond UK.
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What happens next for Diamond?
The most likely scenario is that Diamond is simply sold to the aforementioned runner-up bid from Universal Distribution, LLC, and Ad Populum, LLC. However, that is not a given, as obviously, Universal Distribution, LLC, and Ad Populum, LLC are allowed to change their minds, as well. They were willing to purchase Diamond last month, but it is possible that they are not interested in buying it now.
The third-place bid was Basic Fun! (the company that owns Care Bears, Tonka, Lite Brite, K'nex, Lincoln Logs, Tinker Toys, Playhut, Uncle Milton, Fisher Price Classics, Mash'ems and Littlest Pet Shop), so it is possible that there Basic Fun! might be involved, as well.
Again, since Diamond tried to avoid Alliance Entertainment purchasing it, this could be a good result for everyone involved, but time will only tell based on what happens next with the bankruptcy proceedings. The question of what effect the current United States tariffs had on everything is also an open question.
Source: Milton Griepp at ICV2
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