In what is likely a very important motion impact publishers, Diamond Comic Distributors have filed a motion to approve the procedures for “sale or other disposition of consigned inventory” and more.

The order seeks to do the following:

1. Approve the consignment sale procedures
2. Authorize and approve sales or other disposition of the consigned inventory free and clear of all liens, claims, interests, and encumbrances; and
3. Grant certain related relief

After Diamond’s sale of the majority of its assets to Universal Distribution and Ad Populum/Sparkle Pop, (old) Diamond still has a “significant inventory” that was sent on a consignment basis. I think we all assumed all inventory was moved to the two new owners, but that doesn’t seem to be the case. They had an option and that specific part of the purchase was left as to be determined. Instead, it’s sitting in (old) Diamond’s warehouse in Mississippi.

(old) Diamond is claiming the consignors (the sellers) haven’t followed the legal steps to establish a superior claim to their inventory. In short, the publishers (owners of the product) haven’t done what’s require by law to protect their ownership rights. So now, (old) Diamond has to do something with all of that inventory.

None of the vendors that provided consigned inventory to any of the Debtors filed a U.C.C.-1 financing statement against any of the Debtors prior to the Petition Date.

(old) Diamond is asking the court to approve their plan to market, sell, or dispose of the inventory to “minimize costs and maximize recoveries” and generate the “best result for the estates.”

The list of consignment vendors is long, with 128 publishers listed and every major publisher and numerous game/collectible publishers listed like Marvel, DC, Dark Horse, Image, IDW, Paizo, Cryptozoic, and more. That’s a lot of publishers and the inclusion of “free and clear of all liens, claims, interests, and encumbrances” would make us think they might not see being paid directly for all of that product. Instead it would seem to be used to benefit (old) Diamond and it seems likely would be used to pay off the debt to JPMorgan and not the creditors aka the publishers. That part is a bit nebulous and unclear.

No plan has been put forth yet by (old) Diamond to pay back its creditors. The deadline to submit a plan keeps being pushed out further and further.

You can see the full list of publishers and more below.

Objections of this plan have to be filed on or before July 16, 2025 to speak up. Publishers, this is one you’ll want to act on.