Geppi Family Enterprises CEO Steve Geppi has sent a message to Diamond Comic Distributors suppliers laying out a delayed pay-out plan for the money it owes them, while Alliance Game Distributors suppliers are being contacted individually, a GFE spokesperson confirmed to ICv2. The GFE companies told suppliers last week that they were suspending payments because they “were no long receiving consistent payments from our customers” (see “Diamond, Alliance Suspend Regular Payments”).
The plan laid out for Diamond suppliers includes paying suppliers 25% of amounts normally due for payment for each of the next six weeks, with the remaining 75% put onto a payment plan. After the six-week period, Diamond expects to pay 1/13 of the total deferred amount each week for 13 weeks, completing its payouts in 19 weeks (6 plus 13). Diamond did not specify whether the full amount deferred by skipping payments last week will be put onto the 13-week payment plan or included in the 25% calculations for this week, and did not respond to a clarifying question.
Alliance Game Distributors suppliers were being contacted individually rather than receiving a standard communication, we were told, and it’s not clear whether they’re being offered the same payment plan or some other arrangement.
Of course, it’s not likely that the GFE companies have the unilateral right to change the terms under which they pay suppliers, and suppliers are under no legal obligation to accept the plan. But suppliers don’t have a lot of options short of suing, especially in this period while Diamond and Alliance are not distributing new product.
Geppi Family Enterprises is also taking other steps, including:
- GFE executives, including those of both Alliance and Diamond lineage, are taking a 50% salary cut.
- Landlords have agreed to rent deferrals.
- Providers of professional services have agreed to defer payments.
GFE is using outside advisors to help it navigate the financial restructuring, per Geppi’s message. “My leadership team is working non-stop in concert with expert consultants and our publisher partners to safeguard the comic industry’s future,” he wrote.