Diamond’s deal over its Memphis Warehouse Hits a Bump

One of the outstanding issues with Diamond‘s chapter 11 bankruptcy is the status of its Memphis warehouse. An order approving a deal regarding it was submitted by Diamond but that has hit a bump. The court has directed Diamond to file a Rule 9019 motion due to objections by the Ad Hoc Committee of Consignors and the Consignment Group.

A 9019 motion is a legal filing that seeks court approval for a settlement or compromise of a controversy. The court must then approve it making sure it’s fair and equitable and in the best interest of not just Diamond but its creditors.

The 600,000 square foot commercial warehouse is located in Olive Brandh, Mississippi and was the main warehouse for Diamond. It was believed that gaining it was one of the main reasons Ad Populum/Sparkle Pop purchased Diamond on the bankruptcy but as we’ve learned, Diamond is just leasing it and the transfer to new Diamond has been delayed.

As part of the agreement:

1. (New) Diamond would take over the lease of the warehouse;
2. $451,083.73 will be paid from proceeds escrowed from the closing on the sale to Sparkle Pop that’s in escrow;
3. $84,510.81 will be paid by Diamond.

The $451,083.73 is due to property taxes paid by AIRETT, the landlord, that Diamond failed to pay.