The federal bankruptcy court in Maryland has denied four motions to dismiss complaints in the suits Alliance Entertainment filed against Diamond Comic Distributors and related companies, investment bank Raymond James, restructuring consultants Getzler, Henrich & Associates LLC (along with Chief Restructuring Officer Robert Gorin personally), and Alliance Game Distributors co-CEOs Charlie Tyson and Dan Hirsch (see “Alliance Entertainment Sues Diamond, Again“).
The court also denied Alliance Entertainment’s motion to dismiss a counterclaim filed by Diamond, which alleges that Alliance Entertainment breached agreements signed as part of the sale process and violated the court-ordered bidding procedures. The rulings followed a hearing held last week.
The Alliance Entertainment lawsuit alleges that the defendants intentionally concealed the fact that the distribution contract between Alliance Game Distributors and Wizards of the Coast was ending until after the Asset Purchase Agreement was signed and approved by the court, which led Alliance Entertainment to terminate its asset purchase agreement for the company’s comic and game distribution assets. The counts the judge refused to dismiss were for fraud, against the Diamond companies, restructuring consultants, and Tyson and Hirsch; aiding and abetting fraud, against Raymond James, the restructuring consultants, and Tyson and Hirsch; negligent misrepresentation, against the Diamond companies, restructuring consultants, and Tyson and Hirsch; and breach of implied covenant of good faith and fair dealing, against the Diamond companies.
The court rejected the defendants’ motions to dismiss the Alliance Entertainment claims, and Alliance Entertainment’s motion to dismiss Diamond’s counterclaim, which means those issues will proceed to trial.
Source: ICv2
