In a filing handed down late on April 10, the judge overseeing the Diamond Comic Distributors bankruptcy case appears to have sided with Alliance Entertainment in its battle with Universal Distribution and Ad Populum for ownership of the giant distribution company.
After initially agreeing to sell its assets to Alliance, Diamond owners abruptly terminated the deal in favor of a lower bid by Universal/Ad Populum, an action that prompted Alliance to sue. At a two-day hearing this week, which was originally set to approve the details of the initial agreement, attorneys argued over the legality of Diamond owners’ change of heart.
After listing a number of issues heard in the most recent hearing, the April 10 filing states: “The Court indicated that it was prepared to enter an order approving the sale of substantially all of the Debtors’ assets to Alliance Entertainment, LLC (the “Sale”), upon the Debtors’ submission of a final form of order and revised asset purchase agreement consistent with statements made on the record at the Sale Hearing.” The reference to the revised asset purchase agreement appears to point to Alliance’s decision to up its original offer of $72.2 million to $85.4 million—well above the $69.1 million bid made by Universal/ Ad Populum.
While the brief doesn’t declare Alliance the outright winner, language in the order, which sets April 25 as the deadline for all challenges to be filed, strongly suggest that the court backs Alliance and its higher bid. As of Friday morning, no party had confirmed that Alliance has the final approval to go forward with the purchase, so a last-minute surprise cannot be ruled out.
