Diamond Distributors Update
Moving From Chapter 11 to Chapter 7
Diamond Distributors have moved from Chapter 11 to Chapter 7 of the bankruptcy code. What does that mean? You can read all about Chapter 7 here, but, in summary,
This chapter of the Bankruptcy Code provides for “liquidation” - the sale of a debtor’s nonexempt property and the distribution of the proceeds to creditors.
In simple terms, Chapter 7 allows the company to eliminate debt without a payment plan. The debts can be wiped off the books. Non-exempt assets can be sold to facilitate the payment of these debts. If the funds raised from the sale of the non-exempt assets isn’t enough to pay the debts, bad luck. Those debts will be wiped away without being paid. In terms of bankruptcy, this is the most basic form of bankruptcy for America.
Diamond’s credit rating will be shot.
The recent court filings have thrown up a complete list of what is owed by Diamond via a proof of claims report. We now have the final amounts that Diamond owe individuals, publishers and more. And it’s not good. There’s 155 pages of information to wade through. And none of these people will be paid as the final amount allowed to be paid is…zero.
The largest amount owed is $9,245,465.10 to Bandai Limited, there’s millions owed to Disney, and the lowest is $4:80 owed to an individual. In-between those two extremes there’s amounts owed to TMP International ($1,774,558.48), TwoMorrows ($64,758.20), ComicMix ($5,000), Dark Horse Comics ($86,927.11), Fantagraphics Books ($93,305.80), Ablaze, LLC. ($66,391.08) along with shops, publishers, ex-employees, various state organizations, transport and more. I gave up recording this data into my spreadsheet when I hit 778 entries. I’ll complete it one day. Some of the individual names on the list I know of, some I know personally. It’s heartbreaking.
And then there’s this. These are the final accounts of Diamond Distributors.
The inventory will now be sold to pay off debts. That is if it makes enough to pay off the debts. It probably won’t. And yes, Stephen Geppi, the former owner of the company, owes money to it. I won’t say that debt will be wiped, but, hey, the lawyers are all being paid in full.
The story of Diamond has yet to be writ. When it is finally documented, it will be a cautionary tale of how one man drove his competitors out of business and established monopoly that stretched across the world. It will also detail exactly what happens when monopolies fail - they leave a lot of people out of pocket, out of business and destitute, while those who ran the monopolies generally end up at other companies where they can start again. And the higher the employee (or owner), the more likely they are to be fairly rich when the company fails.
The ones who really suffer? Those who run the companies don’t care about them. They’ve got theirs. So don’t cry for the demise of Diamond, weep instead for the publishers who have now folded due to debt and the lawyers insisting that their stock isn’t really theirs, cry for the stores who have had to find new ways of getting stock into the shops and for the thousands of people who now have to struggle.
You can bet your bottom dollar Steve Geppi isn’t wondering where his next feed is coming from.