In June 2025, Sparkle Pop began a proceeding against Alliance Entertainment for “disregard of binding non-disclosure and non-solicitation obligations and its theft of valuable of trade secrets.” For those who might not remember, Alliance Entertainment originally won the bid for Diamond’s assets, then Diamond went with Universal Distribution and Ad Populum (Sparkle Pop’s parent company), then back to Alliance. Then Alliance ended their bid claiming fraud by Diamond and those involved. Eventually Universal Distribution and Ad Populum/Sparkle Pop won the bid.

Sparkle Pop accuses Alliance for abusing the bankruptcy process and gaining inside access to Diamond’s “employees, trade secrets, and proprietary information, all while delaying the sale of assets to legitimate purchasers.” Alliance recently hired seven Diamond employees which Sparkle Pop calls “poaching” and claiming it has “hobbled” its business. It further claims Alliance has “exploited its inside knowledge of Diamond Comic’s confidential information to usurp key distribution relationships with vendors and customers, further undermining the business.”

Alliance has signed a non-disclosure and non-solicitation agreement that bars the accused conduct according to the motion.

There’s lots of details about violations of NDAs, employee’s confidentially obligations, and that Alliance is attempting to poach Amazon away from Diamond. Former Diamond employees named include Joe Lunday who called Amazon on his last day to tell them of his switching of employers. Diamond Comic’s law firm Saul Ewing has sent a cease-and-desist letter to Alliance on behalf of Diamond.

The motion claims the following counts:

1. Violation of the DTSA
2. Violation of the Maryland Uniform Trade Secrets Act
3. Tortious Interference with Employment Contracts
4. Tortious Interference with the APA and TSA
5. Injunctive Relief

Sparkle Pop is seeking damages to be proved during trial, a temporary restraining order, preliminary injunction and permanent injunction that would prevent further soliciting Diamond employees or any business relationship with Amazon, and using any Diamond trade secrets.

Since June, things have gone a bit wonky. In December of 2025, the parties agreed to some deadlines but Diamond also began to convert from Chapter 11 to Chapter 7 and there was a stay placed on the proceedings until February 2026.

The parties have filed a motion amending the scheduling order and clarify the applicable deadlines now that the stay has been lifted.

Per the latest filing:

1. Fact discovery will continue through November 30, 2026. The Parties may take fact depositions at any time prior to the expiration of the fact discovery deadline.
2. The parties will submit a confidentiality order and protocol for the exchange of electronically stored information to the Court for approval on or before May 27, 2026.
3. Any motion to amend pleadings must be electronically filed no later than August 14, 2026.
4. All other terms of the Joint Report that will binding upon the partes.

Discovery is a key part of trials where the parties get information from each other regarding the case. So, think documents, email and text conversations, stuff like that. It can involve millions of documents that have to be gone through and can be used as evidence in the case.

So, with discovery continuing through November 30, expect this case to go into 2027. You can check out the filed motion below: