One of the major issues that has yet to still be resolved regarding Diamond’s Chapter 7 process is the status of consigned goods being held by (old) Diamond and stored by Sparkle Pop.

At issue is that some inventory was provided by publishers to (old) Diamond when it was in business that was provided on consignment. When Diamond went into Chapter 11, they claimed the goods were theirs due to the lack of some paperwork filed by publishers and the goods were used to obtain a loan. The publishers of course say the goods are theirs and want it back. A fight has been ongoing with a lot of maneuvering in the court.

The Trustee who is overseeing the Chapter 7 case has asked for an extension of a deadline to figure out how to deal with it all.

The Ad Hoc Committee of Consignors as well as members of the Consignment Group have objected for a further deadline extension with a filing featuring some pretty harsh words.

The Ad Hoc Committee of Consignors claims that the delays is an intension to “use remaining estate assets on litigation and attorney’s fees rather than paying creditors.” Instead of using the time to “build consensus and explore settlement opportunities,” the Trustee has used the first sixty days to hire a litigation team in Florida.

Objections to Diamond’s claims have been submitted since at least May 15, 2025 and have dragged out since.

The filing by The Ad Hoc Committee of Consignors is an interesting read laying out their case an argument and you can get a sense of the frustration. The Consignment Group reveals some dirt as to how much is owed to some of the publishers while pointing out that Diamond’s November Operating Report shows $1,308,292.00 cash on hand.

Consignor	Petition Disclosable Economic Interest in Case
Aspen Mlt, Inc	$1,890.50 (Scheduled Amount)
Black Mask Studios	$2,000.15 (Scheduled Amount)
Creative Mind Energy	$12,878.62 (Scheduled Amount)
Dark Horse Comics, Inc	$86,927.11 (Proof of Claim No. 692)
DSTLRY Media	$65,013.15 (Scheduled Amount)
Dynamic Forces, Inc	$244,201.44 (Proof of Claim No. 680)
Graphic Mundi – PSU Press	$15,523.33 (Scheduled Amount)
Heavy Metal Entertainment	$363.37 (Scheduled Amount)
Magnetic Press LLC	$51,067.53 (Proof of Claim No. 684)
Massive Publishing LLC	$40,700.69 (Proof of Claim No. 703)
Oni-LF Publishing Group, LLC	$179,942.40 (Proof of Claim No. 682)
Panini UK Ltd	$4,993.05 (Scheduled Amount)
Punk Bot Comic Books, LLC	$122,006.87 (Proof of Claim No. 509)
Titan Publishing Group Ltd	$413,898.17 (Proof of Claim No. 49)
Total	$1,241,450.29

In a more surprising turn of events, the Chapter 7 Trustee and Sparkle Pop have reached a settlement to:

finally resolve the above captioned bankruptcy estates’ interests in the Consigned Goods, the Distribution Agreements, and the Consignment Litigation (as those terms are defined in the Motion) a component of which is the potential sale and assignment of the estates’ interest therein.

The settlement involves:

1. Sparkle Pop will pay the Trustee $1,000,000, 75% of the first $1,500,000 in Net Proceeds of the Consigned Inventory. Sparkle Pop gets 30% of the gross proceeds as an expense association with selling the Consigned Inventory.
2. If the date this gets settled is before March 1, Sparkle Pop is allowed to get administrative expense claim against the Bankruptcy Estates in the amount of $435,000 and if the effective date is after March 1, that goes up to $585,000.
3. The Trustee is selling and assigning all of the Bankruptcy Estates’ rights in the Consigned Inventory to Sparkle Pop.
4. No more than 10 days after the date of approval, the following actions will be taken:
   • a. Withdraw, with prejudice, the Motion (I) to Enforce the Automatic Stay, (II) To Enforce the Sale Order, and (III) Granting Related Relief [D.I. 784]; and
   • b. Substitute as plaintiff, or proceed to dismiss, without prejudice, the Consignment Adversary Proceedings.
5. Sparkle Pop will provide a list of Consignment Agreements designated for assumption and assignment along with Sparkle Pop’s proposed cure cost for each.

We’re sure the publishers will be responding to this proposal. You can read the documents below: