In a federally mandated notification to the Maryland Department of Labor, Diamond Comic Distributors has stated that if it is not sold Diamond would be forced to cease operations and close its main office laying off as many as 168 employees. This would happen by April 1.

In January, Diamond announced it was filing Chapter 11 reorganization bankruptcy in which it stated it was looking to sell some or all of its business operations. They have made an agreement to sell Alliance Game Distributors to Universal Distributors and it’s likely Universal will also purchase Diamond UK.

While most of the above was known, the April 1 deadline is new and reported publicly through the Maryland government’s Labor website. Filed January 21, the “effective date” is listed as April 1 indicating some further action would take place around that date.

In a notice to employees, Diamond stated:

Diamond Comic Distributors is actively attempting to secure a buyer for its business operations other than its Alliance division. Although we are hopeful to locate a buyer, if our efforts are unsuccessful, Diamond will unfortunately have to cease operations. While we continue to pursue a buyer, the Diamond business will continue as usual.

Diamond has received approval from the court for $41 million debtor-in-possession financing with JP Morgan Chase that will be used to “fund operating expenses and provide adequate working capital to meet its obligations to suppliers.”

The loss of Diamond would send a ripple effect across the comic industry as they are a major distributor but the biggest distributor of small publishers, a piece of the distribution puzzle that other major distributors have currently shown no interest in pursuing. So far, three publishers have announced they would cease distributing through Diamond until the issue has been resolved.