This morning a hearing was held regarding Diamond‘s motion to move from chapter 11 to chapter 7. The motion was approved by the court, placing Diamond in chapter 7. It’s the latest turn of events in a drama that stretches back to January 2025. It’s a sad ending to what was once the 800-pound gorilla that dominated comic distribution for decades.

In chapter 7, a court-appointed trustee sells the debtor’s non-exempt assets to pay off creditors allowing the debtors, in this case Diamond, to pay off their debts. A chapter 11 attempts to reorganize and continue the operations. The primary goal of chapter 7 is to liquidate and sell everything, cease operations, and distribute the funds. It also allows owners who personally guaranteed business loans to discharge those personal liabilities.

In January Diamond Comic Distributors filed chapter 11 after courting buyers late in the previous year. An auction for its assets was held in March 2025 with Universal Distribution and Sparkle Pop walking away with parts of the company after drama involving Alliance Entertainment which originally won the bid but since then has gone to court over it claiming fraud against Diamond and its representatives.

Since then, there’s been fights involving consigned inventory, inventory being sold when it shouldn’t have, and what lead to the chapter 7, Diamond’s bank lender JPMorgan Chase Bank no longer willing to provide funding through the chapter 11 process.

Today, Diamond’s motion for chapter 7 was granted with much more to come in this process which is sure to feature more drama and surprises before the final document is signed and filed.

Evidentiary Hearing Held: re: 679 Miscellaneous Relief AND re: 738 Objection AND re: 740 Opposition AND re: 747 Compel(added per Mediation order at p. 960) AND re: 1060 Objection AND re: 1063 Opposition TO BE CONTINUED. 1070 Motion to Convert Case from Chapter 11 to Chapter 7 IS GRANTED. Order to be prepared by Movant.(related document(s) 679 Miscellaneous Relief, 738 Objection, 740 Opposition, 747 Compel(added per Mediation order at p. 960), 1060 Objection, 1063 Opposition, 1070 Motion to Convert Case from Chapter 11 to Chapter 7, 1070 Motion to Convert Case from Chapter 11 to Chapter 7, 1074 Order on Motion to Expedite Hearing, 1080 Objection) (Taylor, Shanita)

Hearing Disposition