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If nothing else can be taken from the ongoing drama surrounding the bankruptcy and purchase of Diamond Comic Distributors and its associated businesses, it’s become clear that one can rely on confusion and chaos to be the dominant factor in every development. For example, just days after the company’s court-approved buyer terminated plans to purchase Diamond’s assets, it’s emerged that Diamond’s bookkeeping might push the company into non-existence.

In a filing made April 28, acting United States trustee for the region that includes Baltimore, Matthew W. Cheney, requested that the Maryland bankruptcy court convert Diamond’s bankruptcy filing from Chapter 11 to Chapter 7. This isn’t a small change; it’s the difference between the company reorganizing but continuing to operate (Chapter 11) and being liquidated so that those it owes money to have the opportunity to recoup owed monies (Chapter 7).

What is behind the request, according to the filing, is the discovery that Diamond has not filed any of the required Monthly Operating Reports since filing for Chapter 11, essentially failing to maintain proper financial records available to the court (and, as a result, creditors and potential buyers). The failure to file any such reports since the January 15, 2025 bankruptcy filing is seen as a breach of Diamond’s obligations. As a result, Cheney is asking that the court change Diamond’s status.

The filing comes days after Alliance Entertainment, which has been approved by the bankruptcy court to purchase Diamond's assets, withdrew from the deal for unknown reasons, as reported in an April 24 SEC filing.

What this could mean for Diamond — and all stores that use Diamond as a distribution hub, which includes all UK comic book stores relying on Diamond UK as a distributor for publishers including DC and Image Comics — is that Diamond may be dissolved and sold off for parts in an attempt to satisfy the company’s debts to existing creditors, leaving many business, retailers and publishers alike, without an active way to get product to stores, and customers.

A hearing on the subject has been set for May 27.

Get ready for what's next with our guide to upcoming comics, how to buy comics at a comic shop, and our guide to Free Comic Book Day 2025.