In recent weeks, while news of Diamond’s new trade policies has rippled through every level of the comics business, Diamond’s owner, Stephen Geppi, has also been hit with several lawsuits for outstanding debts. While Geppi’s various business interests, including the Geppi Entertainment Museum and Gemstone Publishing , are all separate corporations, the overall picture of debt that emerges is an uncomfortable one for the comics industry.
In one link being widely circulated this morning, court documents reveal that California debt collection agency Creditors Trade Association is suing Gemstone, Diamond, and Geppi for $373,000.00 on behalf of Global Interprint, the print broker for many of Gemstone’s deluxe editions. According to court documents, Gemstone owes the money for the printing bills on such books as Hopalong Cassidy, EC Archives, Frontline Combat, and Haunt of Fear. The bills were run up between December 2007 and September 2008, with none of the monies being paid.
According to another link posted by Rich Johnston on Monday, a “confessed judgment” has been ruled against Geppi in a case involving a $16,466,205.32 debt to P N C Bank. According to one legal expert we checked with, a confessed judgment involves a situation where a debtor signed a written document providing that if specified payment was not made, a judgment could be entered against him for the remaining amount. Although the case is listed as closed, Geppi will have a chance to make further legal motions in a hearing set for March 26th. Unfortunately, the court documents in the case are not online, so no further information on the nature of the debt is readily available. Neither Diamond nor Gemstone is named in this case, at least according to the documents online.
Adding to Geppi’s woes, his entertainment museum has been losing money and has run up a sizable unpaid rent bill as of September:
Geppi’s Entertainment Museum, founded in September 2006 by Diamond Comic Distributors CEO Steve Geppi, is more than $700,000 in debt. Maryland’s Daily Record reports the Baltimore pop-culture museum has accrued about $622,500 in unpaid rent to the Maryland Stadium Authority, and owes more than $77,000 in late fees and unpaid electric bills dating back to February 2007.
According to a report on ICv2, a rent settlement had been negotiated for payment by last December.
In looking at the big picture, the debts mentioned above are all separate from Diamond’s distribution business (although Diamond is named in the Global Interprint suit), but obviously if Steve Geppi can’t pay his bills, something has to give. It certainly puts all of Diamond’s recent cost cutting measures — new trade terms, layoffs and so on — into a new light.