The Official Committee of Unsecured Creditors has filed a statement and “reservation of rights” concerning Diamond‘s motion to sell the remaining consignment stock it has.

In the filing, the committee notes there has been a lot of responses to this particular motion, 12 objections so far and more have contacted the committee.

The committee believes that the motion will cause another round of litigation, increasing costs, and dragging things out. It mentions the two other lawsuits related to Diamond’s Chapter 11 filing and reveals it believes there are $30 million claims by Diamond and Ad Populum against Alliance Entertainment.

The committee thinks facts need to be laid out, and quickly regarding the consignment question with a conference on the motion set for August 5.

Interestingly, there’s mention of “settlement discussions” that will:

1. the projected value of the consigned inventory to be sold in the Consignment Sales and an accounting of same;
2. the projected value of the consigned inventory to be sold in the Consignment Sales, and the claims asserted by consignors, specifically attributable to goods delivered after the Petition Date;
3. whether consignors received consigned inventory, delivered prior to the Petition Date, back from the Debtors after the Petition Date;
4. whether consignors were paid after the Petition Date for consigned goods that were delivered to the Debtors prior to the Petition Date;
5. the amounts of each consignor’s claims against the Debtors’ estates arising prior to or after the Petition Date, and whether those amounts match what is in the Debtors’ books and records; and
6. the costs and expenses incurred by the Debtors in connection with storing consigned inventory since the Petition Date, as well as storage charges paid and owing by consignors since the Petition Date.

The Committee believes these data points and others could be significant and should be factored into any settlement proposal.

It interestingly acknowledges if Diamond can sell the stock, it’d get a potential significant amount of money. But, it may also open them up to “administrative expense claims,” and more legal fights and maneuvering all of which will cost more money.

In short, they think lawyers are about to make a lot more money from Diamond, the debtors, and this potentially is getting dragged out, so they want the court to consider all of that when making a decision.

Read the full motion below: