Diamond’s Chapter 7 Trustee Morgan W. Fisher has filed a motion objecting to the motions by multiple publishers to release consigned stock still held by Diamond.

Fisher lays out five reasons that the millions of dollars worth of consigned inventory shouldn’t be turned over:

1. the estate’s priority interest in the consigned inventory was fixed by federal law on the Petition Date and no post-petition event can divest it;
2. neither rejection under § 365 nor the Agreement’s termination provisions revest title in the Consignors;
3. granting the Motion would circumvent this Court’s own ruling
4. requiring adversary proceedings to resolve title;
5. the legal predicate for the Motion — deemed rejection as of February 17, 2026 — is currently on appeal; and
6. practical obstacles, including a potential warehouseman’s lien and commingled inventory, make the relief unworkable.

This argument has been one that has been waged through most of Diamond’s chapter 11/chapter 7 process. Diamond has stock provided by publishers to sell through consignment. Diamond claims specific processes weren’t followed by publishers to protect that stock during the chapter 11 process and Diamond should be able to sell it to pay back its creditors. Publishers of course want their stock back and recently argue that Diamond and its trustee missed a deadline to assume or reject contracts with publishers and thus they default as rejected and part of that rejection is publishers getting their stock back.

There’s currently about three dozen adversary proceedings between Diamond and publishers to determine the ownership of the stock. If the publishers’ requests are granted, these proceedings would likely end.

Also, the trustee has appealed a decision to not extend the date to accept or reject existing contracts between Diamond and publishers which is part of the publishers’ recent motions.

You can read the motion below which goes into greater detail in Fisher’s arguments about the issue. You can check out all of our coverage including more in-depth details on the above here.