Diamond can avoid the consequences requested by the trustee’s motion if they can show that converting is not in the best interest of the creditors; or can show that a plan will be confirmed within a specified time frame; or can show that their failure to file reports had a good reason and will be cured.
It appears that the second option is the most likely, as Diamond released a statement today confirming that it would not be moving forward with Alliance Entertainment as the acquirer of its assets (see “Alliance Terminates”), and will be moving forward with unnamed second acquirers, presumably the back-up bidders, Canadian distributor Universal Distribution and NECA and WizKids parent Ad Populum (see “More on Termination, Back-Up Bid”).
“Diamond Comic Distributors has pivoted to alternative, exceptionally well-known purchasers who are excited to partner with us,” Diamond Chief Restructuring Officer Robert Gorin said in a statement accompanying the announcement. “These companies have strong balance sheets and, importantly, unmatched presence and experience in our core industries. We are finalizing purchase agreements with these third parties and expect to announce the identities of these purchasers and seek court approval very shortly to complete the sale transactions.”
