It’s been another barnburner of a few days here at Diamond Bankruptcy Central. For those of you who prefer to watch videos, I discussed a lot of this in a livestream with Prana DMS’s Atom Freeman, with some comments from a vacationing Brian Garside of Manage Comics. I think Garside’s comments are particularly interesting with regard to the shutdown of ComicSuite.
Below is more of a catch up than an in-depth dive, but I also refer you to Publishers Respond to Diamond’s Plan to Liquidate Stock at Graphic Policy where a few publishers go on the record with the amount of stock they have at Diamond and some vital background info.
DYNAMITE OWED $1 MILLION AND WON’T MAKE PAYROLL
We’ve previously reported on Dynamite’s motion to get paid more than $500,000 they are owed from a COMBINATION of Old Diamond and New Diamond. Diamond responded that there were offsets and Dynamite had not shown hardship. In a new filing, Dynamite has asked for and been granted an expedited hearing to rule on their claims. And hardship is most definitely being shown, with now more than $1 million owed and their payroll next week in doubt:
6. Dynamite is currently owed over $1 million for shipments made to the Debtor and Ad Populum LLC, a majority of which are administrative expenses. Dynamite, a small company with less than 30 employees, does not have the funds to make payroll next week, if it is not promptly paid by the Debtor. The Debtor has filed a vague objection asserting potential setoffs, but has not communicated any such setoffs to Dynamite. Dynamite is aware of multiple other publishers who remain unpaid for millions of dollars of shipments post-petition.
7. The Debtor has had multiple weeks to prepare for a hearing and has not communicated at all with Dynamite regarding resolution of the Motion.
The hearing will now be held today at 2 pm. In all the legal entanglements regarding this, New Diamond continuing to send publishers statements of sales but not paying them for those sales remains completely baffling.
We reached out to Dynamite for comment but did not hear back from them.
PUBLISHERS ARE LAWYERING UP
Regarding the other very serious matter – Old Diamond’s plans to liquidate their stock, even that on consignment, we’re told that many publishers are consulting legal representation – and a few have left comments suggesting this on various social media posts. Eric Reynolds of Fantagraphics spoke with Rob Salkowitz about the situation:
Did you have any reason to expect that the new ownership was going to pursue anything like this?
We were concerned that they did not have any long term interest in distributing books or comics. But as long as they were paying us, we were giving them the benefit of the doubt moving forward. In regard to the amount owed us by Diamond at the time of the bankruptcy filing in mid January, that money immediately just got tied up in the courts and was completely out of our hands. But when they did that, they [the old management] were very communicative with us.
They got that $45 million loan from Chase to continue operating through the bankruptcy. They agreed to a very generous payment plan. And they continued to pay us every week from mid January to mid-May. So as long as they were doing that and honoring what they told us, we were continuing to sell them books. They acted pretty responsibly up until May 16. And when Ad Populum took over on May 16 everything changed.
Have you had any communication with the new ownership?
To some very small degree. We’ve gotten a couple of replies from them basically telling us that their hands are tied. That was from some of the people who have been there prior to the new regime.
But effectively no. On May 16th they just stopped returning our calls. The only thing we’ve gotten is they’ve referred us to Rob Gorin, the executor of the old Diamond.
CGA HAS NEW OWNERSHIP
In what might be termed a bit of a surprise, CGA (the Collector’s Grading Authority), a CGC rival that is one of Diamond’s smaller assets, has been purchased by a consortium that promises “Stable, Collector-Focused Ownership:” The group consists of Andrew Aiello, of Skyrush – which previously tried to buy CGA in the bankruptcy proceedings – Tom Derby of Collectible Investment Brokerage (CIB), and investor/collector Ben Davis. An offer of $1.65 million was previously reported on this. The PR is here but I preserve it here for posterity:
Collectible Grading Authority (CGA), one of the most respected names in grading collectible toys, action figures, video games and memorabilia, is proud to announce its new, stable ownership committed to honoring the company’s legacy and restoring full confidence within the collecting community.
CGA is the parent company of Action Figure Authority (AFA) and Video Game Authority (VGA), its dedicated divisions for grading action figures and video games. These divisions are trusted by collectors worldwide for their accuracy, consistency, and preservation of collectible value.
The new ownership group includes a team of experienced investors and passionate supporters of the hobby, including Andrew Aiello, founder of Inc. 5000 digital agency Skyrush Marketing, Tom Derby of Collectible Investment Brokerage (CIB), a trusted figure in the collectibles industry, Ben Davis, a successful investor and dedicated collector, along with additional seasoned investors who bring strong business acumen and long-term commitment to CGA’s success. Together, this group brings a powerful blend of strategic leadership, industry insight, and deep respect for CGA’s long-standing role in the hobby.
CGA will continue operating in Georgia, preserving its knowledgeable leadership team and supporting its dedicated staff. The group is committed to strengthening operations, improving service, and gradually expanding offerings, with trust, integrity, and consistency as top priorities.
Key commitments include:
- Preserving CGA’s expert, consistent grading standards and leadership team
- Supporting and carefully growing the staff in its Georgia-based facility
- Re-engaging the collector community with renewed transparency and responsiveness
- Rolling out new services and improvements over time, with announcements to follow
“We understand the concern collectors have felt during the recent transition,” said Andrew Aiello. “Our goal is to bring stability and innovation to CGA. We are proud to carry this legacy forward while continuing to serve collectors with the care and consistency they deserve.”
Collectors can continue to submit their prized items with confidence, knowing that the CGA name, along with its AFA and VGA divisions, remains synonymous with accuracy, professionalism, and integrity. Additional updates will be shared in the coming weeks.
DIAMOND RESPONDS TO ALLIANCE CLAIMS OVER WOTC
This is is very complicated and deserves a deeper dive, but I’ll refer you to Brett Schenker’s coverage for now. You may recall that on April 29th Alliance Entertainment filed a suit against Diamond alleging fraud and seeking to get their $8 million+ deposit back on their attempt to buy Diamond. The issue was WotC ending its relationship with Old Diamond, and Alliance feeling that they had been misled about this, with a resulting drop in the value of the assets. Diamond responded to the complaint with a bunch of filings on Monday, including several co-defendents (including Robert Gorin) asking to be dropped from the suit, and a lot of legal precedents and denials. It’s 158 very dense pages, and I haven’t had time to go through all of it, but Schenker has a summary:
Here’s some of the new information out of the following:
-
-
- Alliance Entertainment felt the loss of Wizards of the Coast’s distribution agreement “warranted a downward adjustment of the APA purchase price in the range of $18-$25 million.”
- Alliance Entertainment’s original bid was $85.37 million in March
- Alliance Entertainment’s revised bid was $58.9 million also in March
- Diamond held a belief that Alliance Entertainment always was planning to back out of its bid
- In April Diamond told Alliance Entertainment that it was going to go with Universal Distribution and Ad Populum at which point Alliance Entertainment agreed to the original agreed upon price
- Alliance Entertainment’s deposit was $8.5 million
-
The above alludes to something of great interest to me, something that has perhaps been mentioned before but that remains one of my burning questions in all of this: Why did Raymond James/Robert Gorin/Old Diamond reject Alliance Entertainment’s original winning bid in favor of Universal/Ad Populum? The response to the AENT complaint – and a kind of cross complaint that also references the OTHER lawsuit that is Diamond vs Alliance – has a lengthy rundown of the proceedings from Old Diamond’s point of view, and as mentioned above, doubts seem to have arisen when AENT changed their bid from $85.37 million to $58.9 million.
37. Specifically, the AENT Auction Bid contemplated certain substantive changes to the March 19 APA and an increase in the Purchase Price, as the AENT Auction Bid provided for total consideration to the Debtor Sellers, as asserted by AENT, of approximately $85.37 million.
38. Consistent with Article IX of the Bidding Procedures, the AENT Auction Bid represented an irrevocable offer by AENT to purchase the Debtor Sellers’ Assets. The Debtor Sellers accepted AENT’s offer, by designating the AENT Auction Bid as the highest and best bid at the Auction.
39. Following the Auction, AENT submitted to the Debtor Sellers a revised form of the March 19 APA, but the revised agreement was materially inconsistent with the AENT Auction Bid and provided for total consideration to the Debtor Sellers of only approximately $58.9 million. Over the course of the next week, the Debtor Sellers attempted to negotiate with AENT, but AENT refused to make all the changes necessary to conform the March 19 APA to the AENT Auction Bid.
40. On April 1, 2025, the Debtor Sellers’ counsel informed AENT’s counsel that the Debtor Sellers intended to seek Bankruptcy Court approval to sell their Assets to the back-up bidders Universal Distributors, LLC (“Universal”) and Ad Populum, LLC (“Ad Pop,” collectively with Universal, the “Backup Bidders”). It was only after AENT was told that the Debtor Sellers would seek Bankruptcy Court approval of sales to the Backup Bidders, that AENT finally agreed to conform the March 19 APA to the AENT Auction Bid, but by that time, the Debtors had significant concerns that AENT would not honor its obligations and close the transactions contemplated by the AENT Auction Bid.
41. AENT appeared at a hearing on the Sale Motion on April 7, 2025 (the “Sale Hearing”) and opposed the sale of the Debtor Sellers’ Assets to the Backup Bidders and informed the Court that it was prepared to honor the AENT Auction Bid. Specifically, AENT’s counsel made clear that AENT had completed due diligence through its own investigation and inspection of the Debtor Sellers’ Assets, representing to the Bankruptcy Court that “Sitting right back there is the Chairman of the Board of Alliance Entertainment who has a pen in his pocket who is willing and ready and able to close this transaction immediately after, if Your Honor enters an order approving the sale to Alliance and the debtors sign the agreement” and that “There is no risk, zero percent chance, that Alliance won’t close. My client will stay in this courtroom with Your Honor and with the debtors signing the agreements and arranging the wires. He will not fly home — he lives on the West Coast — he will not fly home until this deal is closed should Your Honor approve a sale to Alliance.” See April 7, 2025 Sale Hearing transcript (“Hr’g Tr.”) at 28:2-7; 29:11-14.
AENT’s counsel further told the Court that “[I] will tell you this, Your Honor, and Mr. Ogilvie will tell you this too under oath, that if Alliance does not close within two or three days of getting an order, at most – we’re saying immediately – but if lighting strikes and the banks go on strike and we can’t wire money, then we’ll back out and you could sell to the backup bidders…So there is absolutely no risk in proceeding with Alliance…” Hr’g Tr. at 30:15-23.
42. Counsel’s statements were consistent with AENT’s Chairman’s, Mr. Bruce Ogilvie’s, testimony at the Sale Hearing that AENT was ready to close “as soon as this Plan is confirmed, the Judge signs it and it’s so ordered.” Hr’g Tr. 219: 18-19. 43. Following a full day, contested evidentiary hearing, AENT and the Debtor Sellers engaged in negotiations and the Debtor Sellers, following consultation with their lender, JP Morgan Chase Bank, N.A., and the Official Committee of Unsecured Creditors (the “Committee”), agreed, subject to Bankruptcy Court approval, to sell their Assets to AENT pursuant to terms consistent with the Final APA.
Obviously a lot of “he said/he said” here, but guessing that if Alliance had paid $83 million for Diamond, they might have later thought they severely overpaid. One humorous (?) note: the response also alludes to Ogilvie’s infamous podcast appearance and one new tidbit:
106. AENT’s breach of the Confidentiality Agreement by hiring the DCD Employees is consistent with numerous other breaches of the Confidentiality Agreement, including:
a. Following the Auction, on March 25, 2025, in breach of the Confidentiality Agreement, and without the Debtors’ knowledge, agreement or consent, AENT Holdco’s and AENT’s Chairman, Mr. Ogilvie, appeared on a podcast called “Beyond Wednesdays” for over an hour in which he discussed the Debtors’ Sale Process, the Auction, his discussions with another bidder prior to the Auction, his understanding of the Debtor Sellers’ Assets and businesses, his lack of familiarity with the comic book distribution business, AENT’s views regarding certain of the Debtor Sellers’ business practices, i.e. “Free Comic Book Day,” and certain of AENT’s plans or ideas regarding business operations post-closing;
b. During the Sale Process, and without the Debtors’ knowledge, agreement or consent, and upon information and belief, Jeffrey Walker, AENT’s Chief Executive Officer and Chief Financial Offer, contacted several of the Debtors’ retailers, including Lone Star Comics, to discuss, upon information and belief, the Debtor Sellers’ businesses and AENT’s acquisition of the same;
English (US) · 