Sparkle Pop has 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 states there are “8,250,936 units of these goods being stored at the Mississippi Facility.”
Sparkle Pop also states 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.
Sparkle Pop also takes a bit of a jab at Diamond, and its Trustee Morgan W. Fisher, claiming insurance on the goods being stored is not being maintained. While the facility is insured, the goods are not. This is part of the argument by publishers that the previous agreement between them and (old) Diamond is now void and in some way support their argument and claim. The agreement between (old) Diamond and publishers states insurance will be maintained. The publisher’s argument is that when that insurance lapsed it was a violation of their agreement and thus negates their contract triggering a process laid out in the contract where they would get back the consigned goods.
Sparkle Pop goes on to state that the goods are taking up so much space, it denies Sparkle Pop’s use of the facility for its own goods and ability to conduct and operate its own business.
Sparkle Pop is, in effect, being denied the value of the assets that it purchased through the Asset Purchase Agreement.
The distributor is renting additional storage space at its “sole (and significant)” cost to store its own goods which also means additional insurance for the new location. Even if (old) Diamond’s consigned inventory is moved, it’ll be further cost to Sparkle Pop to move their inventory to the facility and space currently being taken up by (old) Diamond. There’s also the increase expenses of just managing and having to work around (old) Diamond’s inventory.
In short, Sparkle Pop is now arguing it is suffering damages from (old) Diamond’s consigned goods being stored in their facility.
Sparkle Pop is looking to be for all of its fees and costs related to the consigned goods or it could 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.”
A “warehouseman’s lien” allows the warehouse to retain possession of the goods on its premises until the outstanding charges or depts are paid by the owner of the goods. It’s a security to make sure the debts are paid. If the debts are unpaid, they could then sell the goods to recover the unpaid amounts.
What’s not mentioned is the accusation that Sparkle Pop is still selling the consigned goods in violation of a court order. The Ad Hoc Committee of Consigners in a filing has evidence and accused the distributor of continuing to do so.
The extensive filing, which you can see below, includes a listing of the consigned stocked currently being held. At 125 pages, it’s a lot to go through, but you can see what comics, publishers, and creators are impacted by this mess. It’s not everything, there’s publishers missing that are currently fighting in court, but it highlights 14 publishers.
