Tag Archives: diamond comic distributors

Diamond Throws Ad Populum Under the Bus and More in a Released Transcript

Posted on by
Diamond Comic Distributors

As part of Diamond’s recent filing against the Ad Hoc Committee of Consignor’s motion to assume or reject contracts, a transcript from an August 5 hearing was released. The hearing covered a whole bunch of topics and there’s a lot of juicy details coming out of it.

Here’s the highlights of the 55 page document:

  • During a July 17 hearing, there was a mention of “significant discovery” by the Objectors but there hasn’t been up to this point. There was a lot of information requests that Diamond provided. There were requests for discovery after this date.
  • There’s been questions as to who is selling consigned inventory. Diamond hasn’t but the counsel throws Ad Populum under the bus claiming they were and have been told to stop.

In discussions with certain Objectors, the issue of whether the Debtors are continuing to sell consigned inventory today has been raised. So, I want to be very clear for the record that the Debtors are not currently selling consigned inventory, and they have not sold any consigned inventory since the closing date of the sales of substantially all assets to the two purchasers, Universal and Sparkle Pop. The Debtors have become aware of the fact that Sparkle Pop, one of the purchasers of some of the Debtors’ assets, has been selling consigned inventory on or after May 16th. The Debtors promptly notified Sparkle Pop, both the principals at Sparkle Pop and Sparkle Pop’s counsel, to immediately stop any sales as to the consigned inventory because consigned inventory was explicitly excluded from the acquired assets under that APA.

The Debtors have sent several written communications to Sparkle Pop’s counsel and have verbally informed both the principals at Sparkle Pop and their counsel that they’re not to be selling the consigned inventory, that it’s in violation of the APA, and the Debtors have demanded that the proceeds of any such sales be remitted back to the Estates. Sparkle Pop has yet to respond to the Debtors’ various outreach. However, the Debtors are aware of the issue. We’re not hiding the ball there. The Debtors continue to raise this issue with Sparkle Pop and will continue to take the appropriate action to recover amounts realized by Sparkle Pop from the sale of any inventory on or after May 16th. So, this has been a topic in the informal discussions. The Debtors have provided information on this topic as it has been requested to the objection — to — as it has been requested by the objecting parties. So, we’re aware of it. We’re working to resolve it. We’re providing the information relating to that issue as it’s requested.

Here’s our question, and why this doesn’t quite pass the smell test… if Sparkle Pop didn’t buy the “consigned inventory,”

  1. How do they know what inventory there was to sell?
  2. How did they deliver any of that inventory, assuming they have delivered it?
  • Diamond has worked on a resolution regarding the consignment inventory and though they’ve presented that to publishers, as of that hearing, non took on Diamond on their offer. There was a counteroffer. We’re told there’s been talking of publishers purchasing back their inventory.
  • Less than 20% of Diamond’s sale of inventory is the sale of inventory on consignment. There’s been accusations this is a fudging of numbers because Diamond includes items like Diamond Select which wouldn’t be consignment. But, when it’s just comic or game publishers, it’s over 20%.
  • There’s a lot of comments about the lack of Discovery, the process where individuals ask for evidence, believing it hadn’t been asked for because it wasn’t necessary or too expensive. Discovery requests came later that day from multiple groups and on August 8. There was also discovery asked for and Diamond only provided it through May 15 which is when the sale to Sparkle Pop and Universal closed and Diamond didn’t provide information for any sale prior or subsequent to that date but there has been property sold. The Court did have issue about further requests for discovery but Counsel for some of the debtors pushed back saying they had no idea who to ask for what since they had no idea who was selling the consigned goods. Sparkle Pop is again thrown under the bus.
  • The current loan from JPMorgan matures on August 23 and any further negotiations concerning that relies on what happens with the consignment motion from Diamond.
  • The consignment sale would result in the “significant amount of money” for Diamond. The wholesale value mentioned is $20 million for just some of the inventory. So, what Diamond has is far more than that, exceeding even our estimate based on responses from publishers. GAMA’s counsel says the inventory is “a couple hundred thousand dollars.”
  • The Court questions how JPMorgan didn’t know Diamond was selling goods on consignment from others? The lawyer for JPMorgan basically response with “Diamond has a lot of divisions and sells a lot of stuff” and Alliance and their game distribution needs to be factored in. The retort is that Diamond’s consignment motion is only for Diamond so their other divisions shouldn’t be factored in.
  • There’s questions as to why the process is being rushed as there’s no contract to purchase the inventory out there?
  • The Court was surprised Penn State University is part of this… they publish graphic novels/comics through the Graphic Mundi imprint.

From what I understand, it’s not a terribly profitable business, but it’s one that is educational.

  • Maybe Sparkle Pop isn’t selling consigned goods?

We received a representation in an e-mail yesterday in response to an inquiry received that’s saying that neither Debtor nor Sparkle Pop was selling any of these consigned goods, but many of my clients have received, I believe, solid evidence of the fact that that’s going on.

  • Diamond gets slapped a bit for not filing their monthly reports on time.

And with that… the hearing on August 18 was set with a lot on the docket to discuss.

Read the entire transcript below. It’s a doozy!

Objections Filed Regarding the Motion Requiring Diamond to Assume or Reject Contracts

Posted on by
Diamond Comic Distributors

Monday is a pretty big day for Diamond’s Chapter 11 filing. Quite a few motions will be heard, all of which have seen objections, filings in support, and back and forth of all of those! We’ve seen a lot of objections filed already as well as witness and exhibit lists.

Diamond and their lender JPMorgan Chase Bank have filed objections to a motion from the Ad Hoc Committee of Consignors that would push Diamond to assume or reject contracts with publishers as well as related relief.

In Diamond’s motion, they open stating that the Ad Hoc’s motion wasn’t in a vacuum and was in response to Diamond’s motion to try to sell the inventory it still had. In what feels like a no dun, Diamond states that the filing from the Ad Hoc was because if its motion is granted, the motion from Diamond to sell the inventory would be moot.

Diamond’s case that it should be denied is:

  1. The Ad Hoc has not satisfied and cannot satisfy, the legal standards that govern the motion to compel or reject contracts;
  2. If granted the Ad Hoc’s motion would all the consignors, aka publishers, to reclaim their products immediately and if they did, Diamond wouldn’t be able to sell it.
  3. The motion if approved would be deemed a termination of the agreements which goes against case law, including a recent Supreme Court Decision.

Where things REALLY get interesting is the inclusion of a transcript with all sorts of juicy details. We’ll get to that in a different article. It’s REALLY good stuff.

JPMorgan hopped in with their own opposition. It again points to the failure of publishers to file the UCC-1 paperwork that would have protected their inventory during the bankruptcy. They reiterate Diamond’s stance that it’s an attempt to undermine Diamond’s consignment motion. JPMorgan argues the rejection of the contracts doesn’t result in termination of the Vendor Contracts and if it were rejected it wouldn’t end the dispute over the inventory. And even if the contracts are terminated, it doesn’t permit the return of the consigned inventory because they’re subject to JPMorgan’s lien against Diamond. That’s kind of at the heart of all of this and other motions have stated the loan shouldn’t have been given with the inventory as collateral to begin with and JPMorgan should have known better.

You can read all of the filings below, including the transcript which we’ll have further details about in a follow up article.

More Objections Filed Going into Diamond’s Monday Hearing

Posted on by
Diamond Comic Distributors

Monday is a pretty big day for Diamond’s Chapter 11 filing. Quite a few motions will be heard, all of which have seen objections, filings in support, and back and forth of all of those! Yesterday saw a flurry of objections to the Ad Hoc Committee of Consignors’ motion to stay Diamond’s motion to approve its sale or other disposition of consigned inventory.

Diamond’s Objection:

  1. Diamond filed an objection attacking the Ad Hoc Committee’s cited legal authority saying it doesn’t support their relief. Basically, the previous court case that the Ad Hoc Committee mentioned does say what they claim it does.
  2. Diamond also emphasizes it is indeed their property to sell, something many have called into question.
  3. Diamond states again that publishers didn’t file the proper paperwork stating the inventory is theirs.
  4. Sparkle Pop’s email to publishers as to who owes what isn’t relevant.
  5. There’s a swipe at a delay in an Ad Hoc filing with more cases supporting their case and then goes on to say the cases don’t support Ad Hoc’s case.

JPMorgan Chase filed a reply in support of Diamond’s motion for the sale. JPMorgan is the lender to Diamond and would financially benefit from the sale in that the money would go towards paying back the loan. Their filing pretty much comes down to “we get paid first and have an interest in this going through so we can get paid.”

They also filed a memorandum with points supporting their reply in support of Diamond. In it they state:

  1. The publishers didn’t fill out the UCC paperwork in time.
  2. The publishers have to prove that the creditors knew that the debtors were “substantially engaged in the sale of consigned inventory.”
  3. Diamond can sell the inventory even if a “bona fide dispute” exists

JPMorgan concludes that the Ad Hoc’s argument is based on outdated decisions and “obsolete cases.”

Finally, the Official Committee of Unsecured Creditors also objected to the Ad Hoc Committee’s motion. They state:

  1. Diamond’s motion shouldn’t be stayed because due process has been provided.
  2. There’s been a lot of time but discovery requests were only recent.
  3. Diamond is under financial constraints and the process has been sufficient.

Monday’s Diamond Chapter 11 Hearing Agenda Released

Posted on by
Diamond Comic Distributors

A pretty important meeting is being held Monday regarding multiple aspects of Diamond’s Chapter 11 process. It’s a packed meeting hitting multiple motions and a lot of back and forth.

An agenda has been released today with what’s being covered. The hearing takes place August 18 and 9:30 am ET.

MATTERS GOING FORWARD

  1. Debtors’ Motion for Entry of an Order (I) Approving the Sale and Purchase Agreement Among Debtors Comic Exporters, Inc. and Diamond Distributors Uk, Ltd; (II) Approving Sale of Shares Free and Clear of All Liens, Claims, Encumbrances and Other Interests; and (III) Granting Related Relief [D.I. 638, Filed 7/23/25].
    Objection Deadline: August 13, 2025
    Responses Received:
    a. Reservation of Rights and Limited Objection of JPMorgan Chase Bank, N.A. to Debtors’ Motion for Entry of an Order (I) Approving The Sale and Purchase Agreement Among Debtors Comic Exporters, Inc. And Comic Holdings, Inc., and Diamond Distributors Uk, Ltd; (II) Approving Sale of Shares Free and Clear of All Liens, Claims, Encumbrances and Other Interests; and (III) Granting Related Relief [D.I. 716, Filed 8/13/25].
    Related Pleadings:
    a. Debtors’ Witness and Exhibit List for the Hearing Scheduled to Begin on August 18, 2025 at 9:30 a.m. (ET) [D.I. 715, Filed 8/13/25].
    Status: This matter is going forward.
  2. Debtors’ Motion for Entry of an Order (I) Approving Procedures for Sales or Other Disposition of Consigned Inventory, (II) Approving the Sales or Other Disposition of Consigned Inventory, and (III) Granting Related Relief [D.I. 531, Filed 6/25/25].
    Objection Deadline: July 16, 2025. Extended for Image Comics, Inc. (“Image”) and JPMorgan Chase Bank N.A., (“JPM”) to July 18, 2025 at 12:00 p.m. (ET); Extended for the Official Committee of Unsecured Creditors (the “Committee”) to July 25, 2025.
    Responses Received:2
    a. Humanoids, Inc.’s Objection to Debtors’ Motion for Entry of an Order Approving (I) Procedures for Sale or Other Disposition of Consigned Inventory, (II) Approving Sales or Other Disposition of Consigned Inventory Free and Clear of Liens, Claims, Interests or Encumbrances, and (III) Granting Related Relief [D.I. 598, Filed 7/16/25].
    b. Ad Hoc Committee of Consignors’ Objection to Debtors’ Motion for Entry of Order Approving (I) Procedures for Sale or Other Disposition of Consigned Inventory, (II) Approving Sales or Other Disposition of Consigned Inventory Free and Clear of Liens, Claims, Interests or Encumbrances and (III) Granting Related Relief [D.I. 601, Filed 7/16/25].
    c. Objection of the Game Manufacturers Association to the Debtors’ Motion for Entry of an Order Approving (I) Procedures for Sale or Other Disposition of Consigned Inventory, (II) Approving Sales or Other Disposition of Consigned Inventory Free and Clear of Liens, Claims, Interests or Encumbrances and (III) Granting Related Relief [D.I. 602, Filed 7/16/25].
    d. Objection to Debtors’ Motion For Entry of an Order (I) Approving Bidding Procedures for Sale or Other Disposition of Consigned Inventory Free and Clear of Liens, Claims, Interests or Encumbrances and (III) Granting Related Relief [D.I. 603, Filed 7/16/25].
    e. Objection to Debtors’ Motion for Entry of an Order (I) Approving Procedures for Sales or Other Disposition of Consigned Inventory, (II) Approving the Sales or Other Disposition of Consigned Inventory, and (III) Granting Related Relief [D.I. 606, Filed 7/16/25].
    f. Reservation of Rights and Limited Objection of JPMorgan Chase Bank, N.A. to Debtors’ Motion for Entry of an Order Approving (I) Procedures for Sale or Other Disposition of Consigned Inventory; (II) Approving Sales or Other Disposition of Consigned Inventory Free and Clear of Liens, Claims, Interests or Encumbrances, and (III) Granting Related Relief [D.I. 611, Filed 7/17/25].
    g. Objection of Image Comics, Inc. To Debtors’ Motion for Entry of an Order Approving (I) Procedures for Sale or Other Disposition of Consigned Inventory, (II) Approving Sales or Other Disposition of Consigned Inventory Free and Clear of Liens, Claims, Interests or Encumbrances and (III) Granting Related Relief [D.I. 612, Filed 7/18/25].
    h. Statement and Reservation of Rights of the Official Committee of Unsecured Creditors Regarding the Debtors’ Motion for Entry of an Order Approving (I) Procedures for Sale or Other Disposition of Consigned Inventory, (II) Approving Sales or Other Disposition of Consigned Inventory Free and Clear of Liens, Claims, Interests or Encumbrances and (III) Granting Related Relief [D.I. 653, Filed 7/25/25].
    i. Objection to Debtors’ Motion For Entry of an Order (I) Approving Bidding Procedures for Sale or Other Disposition of Consigned Inventory Free and Clear of Liens, Claims, Interests or Encumbrances and (III) Granting Related Relief [D.I. 674, Filed 7/31/25].

Related Pleadings:

a. Debtors’ Witness and Exhibit List for the Hearing Scheduled to Begin on August 18, 2025 at 9:30 a.m. (ET) [D.I. 715, Filed 8/13/25].
b. Ad Hoc Committee of Consignors’ Witness List for August 18, 2025 [D.I. 717, Filed 8/13/25].
c. Ad Hoc Committee of Consignors’ Exhibit List for August 18, 2025 [D.I. 718, Filed 8/13/25].
d. Consignment Group’s Exhibit and Witness List [D.I. 719, Filed 8/13/25].
e. The Game Manufacturer Association’s Witness and Exhibit List for August 18, 2025 Hearing [D.I. 720, Filed 8/13/25].
f. JPMorgan Chase Bank, N.A.’s Witness and Exhibit List for the Hearing Scheduled to Begin on August 18, 2025 at 9:30 AM [D.I. 721, Filed 8/13/25].
g. JPMorgan Chase Bank, N.A.’s Omnibus Reply (A) in Support of Debtors’ Motion for Entry of an Order Approving (I) Procedures for Sale or Other Disposition of Consigned Inventory, (II) Approving Sales or Other Disposition of Consigned Inventory Free and Clear of Liens, Claims, Interests or Encumbrances; and (B) in Opposition to Consignment Vendors’ Objections to Same [D.I. 728, Filed 8/14/25].
h. Omnibus Reply in Support of Debtors’ Motion for Entry of an Order Approving (I) Procedures for Sale or Other Disposition of Consigned Inventory, (II) Approving Sales or Other Disposition of Consigned Inventory Free and Clear of Liens, Claims, Interests or Encumbrances and (III) Granting Related Relief [D.I. 730, Filed 8/14/25].

Status: This matter is going forward as to all objections received with the exception of Image’s objection. The Debtors have resolved Image’s objection in principle and the parties are working on a stipulation to be filed with the Court. The Debtors and the Game Manufacturer Association (“GAMA”) have been engaged in extensive negotiations, and the Debtors are optimistic that GAMA’s resolution will be resolved in advance of the hearing.

  1. Ad Hoc Committee of Consignors’ Motion to Stay Debtors’ Motion for Entry of an Order (I) Approving Bidding Procedures for Sale or Other Disposition of Consigned Inventory Free and Clear of Liens, Claims, Interests or Encumbrances and (III) Granting Related Relief [D.I. 649, Filed 7/24/25].

Objection Deadline: August 7, 2025. Extended for the Debtors, the Committee and JPM to August 14, 2025.

Responses Received:

a. Debtors’ Objection to Ad Hoc Committee of Consignors’ Motion to Stay Debtors’ Motion for Entry of Order Approving (I) Procedures for Sale or Other Disposition of Consigned Inventory, (II) Approving Sales or Other Disposition of Consigned Inventory Free and Clear of Liens, Claims, Interests or Encumbrances and (III) Granting Related Relief [D.I. 727, Filed 8/14/25].
b. Opposition of JPMorgan Chase Bank, N.A. To Ad Hoc Committee of Consignors’ Motion to Stay Debtors’ Motion for Entry of an Order Approving (I) Procedures for Sale or Other Disposition of Consigned Inventory; (II) Approving Sales or Other Disposition of Consigned Inventory Free and Clear of Liens, Claims, Interests or Encumbrances, and (III) Granting Related Relief [D.I. 729, Filed 8/14/25].
c. Objection of the Official Committee of Unsecured Creditors to the Ad Hoc Committee of Consignors’ Motion to Stay Debtors’ Motion for Entry of Order Approving (I) Procedures for Sale or Other Disposition of Consigned Inventory, (II) Approving Sales or Other Disposition of Consigned Inventory Free and Clear of Liens, Claims, Interests or Encumbrances and (III) Granting Related Relief [D.I. 735, Filed 8/14/25].

Related Pleadings:

a. Line Filing Supplemental Cases Supporting Motion to Stay [D.I. 713, Filed 8/12/25].
b. Debtors’ Witness and Exhibit List for the Hearing Scheduled to Begin on August 18, 2025 at 9:30 a.m. (ET) [D.I. 715, Filed 8/13/25].
c. Ad Hoc Committee of Consignors’ Witness List for August 18, 2025 [D.I. 717, 8/13/25].
d. Ad Hoc Committee of Consignors’ Exhibit List for August 18, 2025 [D.I. 718, Filed 8/13/25].
e. JPMorgan Chase Bank, N.A.’s Witness and Exhibit List for the Hearing Scheduled to Begin on August 18, 2025 at 9:30 AM [D.I. 721, Filed 8/13/25].

Status: This matter is going forward.

  1. Motion Seeking Entry of an Order Requiring the Debtors to Assume or Reject Executory Contracts with Members of Ad Hoc Committee of Consignors and for Related Relief [D.I. 679, Filed 8/1/25].
    Objection Deadline: August 15, 2025

Responses Received:

a. Debtors’ Objection to Motion Seeking Entry of an Order Requiring the Debtors to Assume or Reject Executory Contracts With Members of Ad Hoc Committee of Consignors; and for Related Relief [To be filed].
b. JPMorgan Chase Bank, N.A.’s Objection to Motion Seeking Entry of an Order Requiring the Debtors to Assume or Reject Executory Contracts With Members of Ad Hoc Committee of Consignors; and for Related Relief [To be filed].

Related Pleadings:

a. Debtors’ Witness and Exhibit List for the Hearing Scheduled to Begin on August 18, 2025 at 9:30 a.m. (ET) [D.I. 715, Filed 8/13/25].
b. Ad Hoc Committee of Consignors’ Witness List for August 18, 2025. [D.I. 717, Filed 8/13/25].
c. Ad Hoc Committee of Consignors’ Exhibit List for August 18, 2025 [D.I. 718, Filed 8/13/25].
d. JPMorgan Chase Bank, N.A.’s Witness and Exhibit List for the Hearing Scheduled to Begin on August 18, 2025 at 9:30 AM [D.I. 721, Filed 8/13/25]

Status: This matter is going forward.

  1. Debtors’ Motion for Entry of an Order Approving Fifth Stipulation Between Debtors and JPMorgan Chase Bank, N.A., Amending Dip Credit Agreement [D.I. 527, Filed 6/24/25].

Related Pleadings:

a. Order Approving Fifth Stipulation Between Debtors and JPMorgan Chase Bank, N.A., Amending Dip Credit Agreement [D.I. 559, Entered 7/3/25].

Status: This matter is going forward as a status conference.

Witnesses and Exhibits Revealed for the Diamond’s Chapter 11 August 18 Hearing

Posted on by

August 18 is the next big day in Diamond’s Chapter 11 drama. A hearing will be held on that day at 9:30 am covering a whole host of topics and motions.

The hearing includes:

  1. Diamond’s motion for the sale or disposition of the inventory it still has
  2. The sale and purchase of Diamond UK
  3. The Ad Hoc committee’s motion for a stay in Diamond’s motion for the sale of inventory
  4. A motion dealing with an order that’d require Diamond to assume or reject the contracts it has with some of the publishers

That’s a lot to cover in a single say and with that there’s various witness and exhibition lists that have been filed.

For the sale of Diamond UK:

  • Diamond will call Robert Gorin, Diamond’s Co-Chief Restructuring Officer as a witness and the exhibit is the purchase agreement for the sale.

JPMorgan filed a motion about the reservation of rights and limited objection concerning this one. They want to get paid first if this is goes through.

For the sale of the goods, that’s a whole other thing…

Diamond has:

  1. Gorin will be called as a witness
  2. Exhibits include inventory reports, sales reports, transition agreements, distribution agreements, and more.

The Ad Hoc Committee of Consigners will be bringing:

  1. Distribution and supply agreements with multiple publishers, reports of sales, and inventory reports (which will be produced through discovery and due August 15)
  2. For witnesses they plan on calling a representative for Diamond as well as Steve Leaf, the Client Consignor Representative.

Movant, which is a bunch of other publishers said it’s:

  1. Submitting contract terms, sales reports for products shipped, as well as documents they find from Diamond and JPMorgan Chase Bank from their discovery, and any documents others submit
  2. For witnesses, they’re calling a corporate designee of each of the 14 members of this group, a corporate designee for Diamond, a corporate designee for JPMorgan, and other witnesses from the other witness lists.

Finally, the Game Manufacturer Association (GAMA) has their list and notes that discovery isn’t due until August 15 so might have more. They are:

  1. Calling a representative of Diamond as a witness
  2. For exhibits, it has listed the distribution agreement with three game publishers

JPMorgan Chase Bank has its own witness and exhibition list. That features:

  1. The final order between JPMorgan and Diamond for its financing

This will be a big day, so stay tuned for further reports and check out all of the documents below:

Multiple Objections by Publishers to Diamond’s Consignment Plan Found Deficient and Stricken

Posted on by
Diamond Comic Distributors

We reported earlier that numerous objections filed concerning Diamond‘s plan to sell inventory on consignment were marked as having deficiencies. The problem for all were that they were filed by individuals or the corporation, and at times lawyers not admitted to the court. To fix the issue, as per this particular court’s rules, the publishers needed to hire a lawyer that was admitted to the Maryland Bankruptcy Court, which of course would cost time and money.

Today, there were seven notices striking the objections from the record. That includes objections by Abstract Studio, Graphitti Designs, Molten Core Media/Magma Comix, TwoMorrows Publishing, William M. Gaines, Agent, Inc. (they had two objections stricken), and NBM Publishing.

That leaves about two dozen publishers represented by various entities and in different groups (that we know of) regularly filing motions regarding Diamond’s Chapter 11 process.

Numerous Requests for Discovery Have Been Filed Against Diamond in its Chapter 11 Case.

Posted on by
Diamond Comic Distributors

While there has been hints in various previous motions that this would happen, multiple motions have been filed requesting discovery in Diamond‘s Chapter 11 case.

What is Discovery?

Discovery is a process that generally takes place pre-trial where the parties exchange information and evidence relevant to the case. Examples are emails, slack messages, text messages, documents, and more.

This is a pretty big deal in that it forces Diamond to reveal internal emails, documents, and other communication regarding various aspects of the Chapter 11 case. The parties that requested this will go through the material collected and provided to find relevant information. Basically, it’s a request for evidence regarding the case and there have been multiple of them.

  • Around July 31, Dynamic Forces had the first request. In it, they requested Diamond produce documents as well as answer questions regarding Dynamic and Dynamite‘s fight over payment and merchandise.
  • Around August 5, the group representing Aspen, Black Mask Studios, DSTLRY, Dark Horse, Dynamic Forces/Dynamite, Heavy Metal, Magnetic Press, Massive Publishing, Oni-Lion Forge Publishing, Panini UK, Punk Bot Comics/Alien Books, Titan Publishing, and Vault Comics sent a similar request also asking for documents as well as answers to questions.
  • Around August 5, a subpoena to testify directed to Sparkle Pop was served to their counsel and on August 6, a request was sent to Diamond to product documents as well as answer questions, this from the Ad Hoc Committee of Consignors.
  • Finally, around August 8, GAMA, which is helping Skyscraper Studios, Roll for Combat, Liminal Esports, and Snowbright Studio asked for documents as well as sent a set of questions like the previous but also sent a list of facts they hope Diamond agrees to (an example would be how much stock Diamond accepted).

All four of these are big deals because it forces Diamond to turn over material that may hurt their case when it comes to their want to sell items on consignment and even what Diamond may owe the publishers. We don’t know what specifically was asked for but it could be slack messages, email, internal documents, etc.

The next steps are:

  1. Diamond has to pull all of the documents and communications requested and figured out what is privileged (conversations with their lawyer) and what is not;
  2. Hand it over to each of the groups that made the requests;
  3. Assuming there’s no disagreement over privilege, the requestors would then need to go over every document and conversation for details and see what’s relevant and helps their case;
  4. From there, we might see hearings, testifying, motions, and maybe some of the documents requested in filings.

This is a big deal in that it forces Diamond to show their hand in a way and arms the creditors in their fight to get paid and their stock returned. They’re going on offense and this is a big part of that. There could be something to help their case or their could be nothing. We may never know the answer to that. It’s an escalation in the case that’s well worth watching.

Diamond Comic Distributor’s May Operating Report Submitted as part of Diamond’s Chapter 11 Process

Posted on by
Diamond Comic Distributors

After a significant delay as well as threats to change their status, Diamond has been submitting “Monthly Operating Reports.” June’s report for Comic Holdings and Comic Exporters have been filed and we got May and June for Diamond Select Toys. After a bit of delay, Diamond Comic Distributors has now filed its May report as well.

The below includes filings for Diamond Comic Distributors, Diamond Select Toys, and Comic Holdings, and Comic Exporters.

Diamond continues to shed employees while “profit” increased due to mostly from “reorganization items.” But, what’s interesting is that gross income for Diamond dropped by about $12.5 million but costs of the goods increased by about $2 million resulting in a gross profit loss.

In January, Diamond Comic Distributors, Diamond Select Toys, and more filed a petition for Chapter 11. But, Diamond hadn’t filed a Monthly Operating Report since commencing the case. The reports for January, February, and March were overdue leading to a motion to switch their status from chapter 11 to chapter 7 or dismiss the case. That motion has been dismissed.

Below is the latest update with a tracking of information for each report.

Here’s the info released for Diamond Comic Distributors:

January 2025February 2025March 2025April 2025May 2025
Current Employees:473 (though 478 at one point)462456456394
Disbursements:$13,683,765$31,600,829$25,132,240$22,744,341$27,230,468
Ending Equity/Net Worth:$5,695,551$2,422,745$269,300-$5,224,936-$30,570,469
Profit:$2,018,090-$10,110,858-$1,700,394-$715,328$41,591,837

Diamond Select‘s information:

January 2025February 2025March 2025April 2025May 2025June 2025
Current Employees:2118171700
Disbursements:$304,181$280,707$210,703$147,011$160,498$17,621
Ending Equity/Net Worth:-$31,352,292-$44,508,649-$45,510,494-$45,904,870-$12,827,322-$14,347,060
Profit:$152,465$151,188$175,356$144,079$13,433$0

Comic Holdings‘ information:

January 2025February 2025March 2025April 2025May 2025June 2025
Current Employees:000000
Disbursements:$0$0$0$0$0$0
Ending Equity/Net Worth:-$27,916,472-$40,848,045-$41,271,204-$41,624,489-$4,392,505-$5,905,302
Profit:$0$0$0$0$0$0

Comic Exporters‘ info:

January 2025February 2025March 2025April 2025May 2025June 2025
Current Employees:000000
Disbursements:$0$0$0$0$0$0
Ending Equity/Net Worth:-$27,916,472-$40,848,045-$41,271,204-$41,624,489-$4,392,505-$5,905,301
Profit:$0$0$0$0$0$0

We’ll have further updates as subsequent months are released.

The Hearing is Set for August 18 to Hear Motions Regarding Diamond’s Consignment Sale Plan

Posted on by
Diamond Comic Distributors

In late June, Diamond filed a motion to approve the procedures for “sale or other disposition of consigned inventory” and more. In short, it has consignment inventory sitting in a warehouse from publishers and it wants to sell that inventory to pay back its debt. What the inventory is, no one really knows beyond Diamond right now and the money would likely go to pay back JPMorgan Chase Bank, its lender during the chapter 11 process.

As you can imagine, the response to Diamond’s plan has been negative with publishers calling it theft and about two dozen of them filing various motions and objections to the plan.

Hearings have been set concerning various motions regarding Diamond’s plan.

Beginning August 18 at 9:30 AM, there will be a hearing to consider:

638 − Motion to Sell Description of Assets attached as Exhibit B Free and Clear of Liens and Notice of Motion. Fee
Amount $199. Notice Served on 7/23/2025, Filed by Diamond Comic Distributors, Inc.. Objections due by 08/13/2025. with three additional calendar days allowed if all parties are not served electronically. Hearing scheduled for 08/18/2025 at 11:00 AM − Courtroom 9−D. Modified on 7/23/2025 to fix text to correctly reflect hearing information provided in notice. Get more info on this motion.

649 − Motion To Stay Debtors Motion For Entry of Order Approving (i) Procedures For Sale or Other Disposition of Consigned Inventory, (ii) Approving Sales or Other Disposition of Consigned Inventory Free And Clear of Liens, Claims, Interests or Encumbrances And (iii) Granting Related Relief Filed by Ad Hoc Committee of Consignors (related document(s)531 Motion to Sell Free and Clear of Liens and Notice of Motion filed by Debtor Diamond Comic Distributors, Inc.).

679 − Motion Seeking Entry of an Order Requiring the Debtors to Assume or Reject Executory Contracts with Members of Ad Hoc Committee of Consignors and for Related Relief Filed by Ad Hoc Committee of Consignors. Get more info on this motion.

The Ad Hoc Committee Drops a Motion asking Out of Diamond, Ad Populum, and Universal Distribution, Who’s Actually Selling the Consignment Merchandise?

Posted on by
Diamond Comic Distributors

There’s been a lot of unanswered questions when it comes to Diamond‘s chapter 11 filing and the purchase of its assets by Universal Distribution and Ad Populum/Sparkle Pop. The Ad Hoc Committee of Consignors has submitted a motion that lifts the veil a bit and gives clues as to some of those answers.

The Ad Hoc Committee of Consignors is a group of creditors, aka publishers, impacted by Diamond’s chapter 11 and also Diamond’s motion to try to sell consignment goods to help pay back its debts. The committee includes Ablaze, American Mythology, Avatar Press, Battle Quest, Drawn & Quarterly, Fantagraphics, Green Ronin, Hermes Press, Living the Line, Paizo, Udon Entertainment, and Zenescope.

At the heart of this motion is the question as to whether anyone can legally sell goods still held by Diamond and if Ad Populum or Universal Distribution properly continued any of the previous Diamond contracts.

In short, who the hell are currently selling and profiting from the comics and games being “sold by Diamond”?

Sit back, because this is a doozy of a filing and we’re going to try to break it down with bullet points for ease and the really interesting parts are in bold…

  • Diamond filed its bankruptcy on January 14, 2025 and on January 21 put in a motion to sell its assets
  • On May 1, Ad Populum/Sparkle Pop and Universal Distribution won the bidding prosses for the assets
  • On June 10, Diamond filed a notice of the sales closing with each closed in mid-May
  • Goods held on consignment by Diamond were excluded from the inventory sold to Ad Populum/Sparkle Pop and Universal Distribution
  • Spark Pop was given 20 business days after closing to decide what contracts it would continue and that includes the contracts (consignors) between Diamond and the publishers
  • Diamond nor Ad Populum/Sparkle Pop filed motions to have the “Consignors’ Contracts assumed and assigned.” This ended in early June 2025
  • Universal Distribution did include assumed contracts in its sale closing which was filed a month after closing. That included Green Ronin Publishing and a distribution agreement with Paizo. But, the purchase agreement and sale order didn’t identify any assigned contracts, so there’s some paperwork issues there.
  • On June 25, 2025, Diamond filed a motion to sell the consigned inventory it has.
  • After, there were a lot of objections to that consignment sale.
  • On April 17, Titan Publishing Group filed an emergency motion to compel Diamond to assume or reject its distribution agreement with Titan
  • On May 16, 2025, Diamond filed a motion objecting to Titan’s motion.

Got all that? In short, no one has filed the paperwork properly to assume or reject the contracts that existed between Diamond and the publishers.

There’s more interesting details…

On May 27, an email was sent to publishers stating the Ad Populum/Sparkle Pop and Universal Distribution were responsible for all sales activity after May 16 and Ad Populum/Sparkle Pop’s Diamond was a new entity. The Ad Hoc’s motion states that the email sent misled the publishers that the “Asset Sale to Sparke Pop was actually a sale of ownership, because it indicated that Diamond continued to operate under the ownership of a new buyer.”

What’s interesting is that that email says Ad Populum is responsible for new stock, but never took over any stock and that the legacy consignment stock continued to be sold… by someone.

And that’s what is at the heart of this motion, who is selling the stock that Ad Populum/Sparkle Pop and Universal didn’t purchase. Diamond isn’t providing information concerning that.

The May E-Mail confirms that the Stock continued to be sold by someone after the Sparkle Pop and/or UDL sales closed, but it is unclear who is selling the Stock. The Debtor has confirmed that it has not sold stock after May 15, 2025, but has declined to voluntarily provide any information to the Consignors as to who sold Stock after May 15, 2025, which Stock was sold, or what payments remain due and owing to the Consignors on account of
the sales. The Debtors have declined to voluntarily provide any information to the Consignors as to how any party other than the Diamond Distributor Debtor could sell Stock without a properly assumed and assigned agreement to do so.

The motion has amounts that are owned to each of the publishers. The 12 publishers are owed at least $555,971.84. But, that amount is unknown and likely higher since Diamond isn’t providing up-to-date reporting as to what’s sold or collected, so that amount may be higher.

The motion goes on further to poke holes in Diamond’s plan to sell the consignment stock and that there are outstanding obligations.

It’s asking for the status of these contracts to be determined and done so soon and the consignors what the contracts to be terminated when if Diamond rejects the contracts.

They’re also conducting discovery to find out who sold the stock after the May 15 sale to Ad Populum/Sparkle Pop.

Buckle up, this is going to get very interesting!

Read all of the filings below:

« Older Entries Recent Entries »