Publishers have been filing objections to Diamond Comic Distributor‘s motion that would allow them to sell, liquidate, dispose of, inventory it currently still has. Many publishers have already been vocal about the motion and many have responded to our inquiries with “no comment” because it’s an ongoing legal matter. So far, TwoMorrows Publishing, Magma Comix, and Graphitti Designs, Abstract Studio, NBM, William M. Gaines, Agent, Inc., Humanoids, a joint filing by 13 publishers, GAMA, the Ad Hoc Committee of Consignors, and Cryptozoic Entertainment have each filed objections to the motion. Diamond’s bank lender JPMorgan Chase filed a “limited objection” and “reservation of rights.” Image Comics has now filed a motion objecting to the motion. That’s about 1/3 of the 128 publishers mentioned as impacted in Diamond’s initial motion.

In Image’s objection, they come out swinging calling it a “brazen attempt by the Debtors to misappropriate Image’s inventory.” They state they’ve been in discussion with Diamond for months for the return of the inventory as well as provide contractually required reporting but were told they’d need to wait to see if Diamond’s new owner Sparkle Pop took on everything. From Image’s filing, it would seem that Sparkle Pop didn’t do that.

Image contends that it wasn’t a consignment agreement with Diamond. Instead, Diamond was an “exclusive agent” tasked with “selling, billing,
warehousing, shipping, collecting, returns handling, and other customary customer services for distribution of Image’s Products.” And, while Diamond held the inventory, it was really Image’s property and then ownership of that merchandise transfers to whomever purchases it. At no point does Diamond own the product.

Image contends this is a blow to Diamond’s statement in their original motion that publishers needed to file a UCC-1 financing statement to preserve their ownership of the merchandise. Instead, since Diamond was just an “agent,” there was no need for that filing.

Image also pokes whole in Diamond’s claim most of their inventory was purchased outright across all of the debtors. Debtors include Diamond Comic Distributors, Diamond Select Toys, and more. Image says that statement is a bit false and that Image didn’t do business with the rest, just Diamond Comic Distributors and that percentage of consignment crosses a threshold sent to make Diamond’s proposal ok according to previous court rulings and bankruptcy law.

Image has threatened discovery between Diamond and its creditors, JPMorgan Chase, to show that JPMorgan Chase Bank knew that Diamond was largely consignment and did not own the inventory it’s intending to sell to pay back JPMorgan.

In the filing we get details on Image’s switch to Lunar Distribution.

• In 2023 Image switched exclusively to Lunar
• In April 2024 Diamond became Image’s exclusive agent in the overseas market
• Image asked Diamond to transfer inventory to Lunar
• Diamond failed to transfer a large portion of that inventory without explanation
• Of the total $2,909,486.23 worth of Image inventory left at Diamond today, $1,231,783.92 (~42%) is inventory that Diamond failed to transfer to Lunar’s possession per Image’s direction.
• Diamond failed to do what was asked

Image also raises the question as to who owns the property Diamond is trying to sell. Since that hasn’t been established, it can’t go forward. It says it’ll be injured through the sale and receive nothing for it.

You can read Image’s full objection below as well as Eric Stephenson’s declaration of support for Image’s objection.