Sparkle Pop’s Motion for Relief is Denied Without Prejudice
While it feels like the comic industry has moved on from Diamond’s chapter 7 process, the court cases are very much still active with numerous major decisions still to be made. In April, Sparkle Pop filed a motion “for relief from the automatic stay to exercise its rights under applicable state law with respect to the goods remaining in a distribution facility owned and operated by Sparkle Pop.” One of the ongoing fights in Diamond‘s bankruptcy concerns consigned goods provided by publishers and still “held” by Diamond. Publishers of course want their inventory back while Diamond claims it has a right to it so it can sell the product and pay back creditors. The inventory is currently being stored in a facility run by Sparkle Pop, one of the winners of the bidding for Diamond’s assets during the bankruptcy.
In the filing, Sparkle Pop stated there are “8,250,936 units of these goods being stored at the Mississippi Facility.”
Sparkle Pop also stated it is owed $641,430 as of April 2026 and has not received its rent payments from (old) Diamond since November 2025. Rent is $125,000 a month. Sparkle Pop previously filed an administrative claim for $580,000 in March.
In short, Sparkle Pop was arguing it is suffering damages from (old) Diamond’s consigned goods being stored in their facility.
Sparkle Pop was looking to be reimbursed for all of its fees and costs related to the consigned goods and it threatened to exercise its “rights and remedies under Mississippi law to, among other things, assert a warehouseman’s lien on the consigned goods and/or take the necessary steps, under applicable law (or with the consent of the parties), to arrange for these goods to be removed from the Mississippi Facility.”
Today, the court has come down with its decision:
Evidentiary Hearing Held: re: 1265 Relief from Stay and Notice of Motion IS DENIED WITHOUT PREJUDICE TO REFILING AFTER 60 DAYS. Order to be prepared by Movant.(related document(s) 1265 Relief from Stay and Notice of Motion, 1277 Objection, 1280 Objection) (Scott, Cherita)
Since it was “denied without prejudice,” Sparkle Pop can refile its motion again with adjustments. It’s possible there was an error in the original filing or new information that has dropped that impacts the original.
We’ll have more information as this court case continues and update this one if more details emerge as to the reason the motion was denied.
