On June 15, 2025, Alliance Entertainment responded to Sparkle Pop‘s request for a preliminary injunction and restraining order against Alliance.

Interestingly, Alliance Entertainment immediately attacks Sparkle Pop’s ability to even sue in the first place. Alliance’s stand is that their NDA is with (old) Diamond, not Sparkle Pop and Diamond’s assets it purchased. There’s also a lack of any harm actually shown.

Alliance also states that while Sparkle Pop says that the former Diamond employees hired by Alliance had access to trade secrets, there’s no evidence they accessed those trade secrets and there’s no evidence presented that Alliance or the employees it hired did anything with any trade secrets nor any specific trade secrets are identified that were misused.

In short, Sparkle Pop’s complaints has a lot of theories and vague accusations but it lacks specifics.

As we pointed out, the vendor list that Sparkle Pop lists as a trade secret was disclosed in Diamond’s bankruptcy case.

Sparkle Pop implies wrongdoing but shows no actual wrongdoing done nor that employees broke any agreements they were subject to, or even what those agreements were.

In the biggest blow to Sparkle Pop’s claims, Alliance states that the employees they hired were part of a mass-layoff on May 16 or were already seeking employment opportunities before they resigned due to the instability of Diamond during the Chapter 11 process.

Alliance highlights that Spark Pop’s firing of employees caused instability within the company causing further departures and are trying to blame Alliance for their own issues.

Alliance highlights it already had a relationship with Amazon, one for 25 years.

In short, Alliance is objecting to Sparkle Pop’s motion because you can’t “stop an action that is not taking place” and that it’s a way to bully Alliance.

Also included are declarations by Bruce Ogilvie, the Executive Chairman of Alliance Entertainment Holding Corporation d/b/a Alliance Entertainment LLC, and Mike Schimmel, one of Diamond’s former employees at the center of the lawsuit.

Schimmel’s declaration is particularly interesting and explosive in multiple ways. In it he states:

Immediately upon the Court’s approval of the sale, Sparkle Pop sought to implement severe cost cuts without consideration of the impact the cuts would have on the business or employee morale. Notably, Sparkle Pop refused to pay certain vendors unless those vendors agreed to substantial discounts and extended payment terms, counter to section 2.3(d) (“Assumed Liabilities”) of the Sparkle Pop asset purchase agreement which provides that Sparkle Pop shall assume “amounts due with respect to open purchase orders for inventory ordered after the Petition Date and not delivered as of the Closing Date as set forth in a schedule to be provided to Purchaser prior to the Closing Date.” Joel Weinshanker, the manager of Sparkle Pop, referred to this as “playing chicken with idiots” – referring to its vendors.

Schimmel states he was asked to leverage his relationships with vendors to get them to sign the new payment terms. Schimmel felt that it would ruin his reputation in the industry if he did so.

There’s also Schimmel’s statement that he was told to “substantially cut” Diamond’s payroll and identify employees to terminate. He was told by Joel Weinshanker to “get on board” with the new program and due to the fact that Schimmel didn’t identify enough staff to fire, that his salary would be reduced by 25%. Schimmel was told by those involved with the Chapter 11 process that he wasn’t under obligation to stay with Diamond and as an “at will” employee he was able to speak with any potential employer and that included those who were involved in the bidding process for Diamond’s assets. Schimmel said on May 11 he refused to accept the lower salary but didn’t resign and that on May 16, he was terminated effective May 17, 2025.

Schimmel’s declaration refutes and contradicts multiple filings by Sparkle Pop, its owner Weinshanker, and Diamond’s CEO. Schimmel states he informed Alliance Entertainment’s Ogilvie he was fired after he was such.

Schimmel includes an email from Diamond’s Fran Callahan on behalf of President Chuck Parker showing he was fired. This directly contradicts some of Sparkle Pop’s motion and details in the declarations by Joel Weinshanker and Charles Parker, both made under penalty of perjury.