Diamond‘s bankruptcy is officially now in chapter 7 which means any remaining assets will be liquidated to pay back creditors. Individuals are appointed to handle the process and in December Morgan W. Fisher was named the interim chapter 7 trustee. On January 5, Fisher filed a motion to employ Zvi Guttman as the general counsel to the trustee in the case. Fisher became the duly appointed interim chapter 7 trustee on January 1. The “employment of general counsel is necessary for the efficient administration of this case and to obtain maximum net recovery of assets for distribution to creditors.”

But, Guttman was already on the case… as part of NECA’s counsel. Early in the case, Guttman served as the local counsel to NECA whose affiliates include WizKids, Sparkle Pop, and Kidrobot. Sparkle Pop is one of the companies that purchased Diamond’s assets.

In the initial filing Guttman states he never spoke to the client and filed motions for the client’s New York counsel, made calls to put the New York counsel in touch with the committee and Debtor’s counsel, and helped the New York counsel attend a telephone hearing. NECA has waived any perceived conflict.

Now, Guttman has filed an official motion to withdraw as NECA’s counsel, we assume to take on the role of general counsel to Fisher.