Category Archives: Lawsuits

Sparkle Pop is Given More Time to Respond to Diamond’s Settlement with Publishers

In August, Diamond and its Trustee Morgan W. Fisher settled with fifteen publishers regarding goods still held by Diamond during its chapter 7/chapter 11 process. The deal allowed the publisher to pay for packing and shipping to get their product back and some money would be paid out to them.

An impacted party regarding this is Sparkle Pop which purchased some of Diamond’s assets and now manages the warehouse the consigned goods are located.

Sparkle Pop will now have until August 28, 2026 to respond to the settlement.

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Paramount Meeting with Attorneys General Canceled Due to “Lack of Good Faith”

ace attorney canceled

Late last week, news broke that Paramount would have a meeting this Monday with the Attorneys General suing them to stop the acquisition of Warner Bros. Discovery over antitrust concerns. The meeting was ordered by the judge and an attempt at mediation before the trial which begins March 2027. That meeting has now been canceled according to California Attorney General Rob Bonta citing a “lack of good faith” in the settlement talks.

In a statement, Bonta said:

My office had a meeting with Paramount on Friday. Paramount did not maintain the confidentiality of that meeting. Not only did Paramount leak the alleged substance of settlement discussions, but they misrepresented these discussions, demonstrating a lack of good faith.

As soon as Paramount stops playing games and engages sincerely, my office is happy to meet again.

Bonta is leading the dozen attorneys general who have banded together in the lawsuit.

Paramount is attempting to acquire Warner Bros. Discovery for about $110.8 billion. They have agreed to delay the closing of the deal until as late as June 2027 as part of the lawsuit.

Bonta has previously accused Paramount of playing games with their threat to move their company out of California as well as its attempt at a $1.88 billion bond from the dozen states as well as the Writers Guild of America which is also suing.

Paramount and State AGs to Have Settlement Talks Next Week and Gavin Newsom Responds to Threats of Paramount Leaving California

The trial between a dozen state Attorneys General and Paramount over its attempt to acquire Warner Bros. Discovery doesn’t begin until March 2, 2027, but the parties will meet next week to discuss a settlement. After approval from the Trump administration and numerous other countries, a dozen Attorneys General sued Paramount in July in attempt to stop its acquisition of Warner Bros. Discovery for $110.8 billion. Antitrust concerns were raised by the deal which would shrink film and television distributors, have paramount control another major news source in CNN, among other issues.

Representatives from Paramount and the offices of the Attorneys General will meet on Monday to discuss the case. The meeting though is mandated under the mediation procedure, so don’t read too much into it. It’s a common step and has been mandated by Judge Araceli Martinez-Olguin.

California Attorney General Rob Bonta said about the meeting:

As I’ve said before, generally for all of my cases, I prefer to resolve disputes in the boardroom, not the courtroom. As I’ve also said, if the opposing party in litigation wants to meet in good faith to make a sincere effort to resolve the case, we’ll meet. And as I have further said, any potential discussions about the Paramount-Warner Brothers merger will be unproductive absent robust structural remedies on the table that address our concerns.

As it stands today, the proposed Warner Bros./Paramount merger will mean higher costs, less competition, lower wages, job cuts, and fewer movies and TV shows. This merger violates long-standing federal antitrust law, and we are committed to enforcing the law.

Paramount has stated they’re willing to work towards and negotiate a solution without a trial and there has been calls from other parties, some unions and theater chains, for the parties to negotiate a settlement.

Paramount has also threatened to leave California over the lawsuit, a move Bonta sees as an attempt to put pressure on the AGs and get them to settle.

Paramount needs the settlement more than the AGs. If the deal isn’t closed by September 30, a ticking fee begins at about $7 million a day, increasing the cost of the deal. The trial has been set for March 2, 2027 and will last 17 days. The delay through the trial, about 169 days, will cost the company $1.15 billion. Paramount is currently seeking a bond of $1.88 billion from the AGs as well as the Writers Guild of America who is also suing. A decision on that won’t happen until late September

Current California Governor Gavin Newsom has said he is taking Paramount’s threat to leave the state “seriously” and hopes it doesn’t happen.

And I’m of the belief they don’t want that to happen. It’s not, I don’t think, in the company’s long-term interest, but I take it seriously.

I’m concerned about the state, our reputation.

Newsom has also teased there are discussions between parties already happening regarding the antitrust lawsuit. Newsom isn’t running again for Governor due to term limits, and his time in the position will end in January 2027, months before the trial is set to begin.

Newsom is teasing a running for President in 2028. When he does, he’ll need/look for the support of Ari Emanuel, the CEO of WME Group and CEO and executive chairman of TKO Holdings, for that run. Emanuel has become a kingmaker in politics wielding a lot of influence in both parties, though it is rumored Ari’s brother Rahm is also thinking of running for President. Importantly for this, Emanuel is an ally of Paramount CEO David Ellison and has penned an op-ed in support of the deal. Those opposed to the deal would likely have a more difficult time getting his support for their political ambitions.

Diamond and Alliance agree to Modify their Lawsuit Schedule

Discovery can be a very long and difficult process with Diamond Comic Distributors, its trustee Morgan W. Fisher, and Alliance Entertainment are all figuring out. In March 2026, a schedule was put in place regarding a lawsuit between Diamond and Alliance Entertainment spinning out of Alliance’s abandoned bid to purchase Diamond’s assets during the chapter 11 process as well as the counterclaims. In April 2025, Alliance Entertainment submitted a complaint against Diamond accusing Diamond of “fraud” and “deception” as far as their relationship with Wizards of the Coast, the company behind Magic: The Gathering.

Part of that schedule is what’s known as “discovery,” the process of exchanging documents such as emails, text messages, instant messages, basically communication and documents, that have to deal with the case. Each side then goes through the documents to find the ones relevant to the case and they can present that during the court hearing. It can involve millions of documents and be a difficult and long process. Often, lawyers outsource this to companies whose entire business is “e-discovery,” going through those documents and tagging the relevant ones and moving on from those that aren’t.

In an order agreed to by all parties, they have said that this is a “document-intensive case” and the parties have been working in good faith to make the process as easy as possible. One such example is agreeing upon search terms to more easily sort through documents. They state there’s “hundreds of thousands” of documents that are relevant to the discovery request.

The parties have worked diligently to review documents, refine their respective proposed search terms, and balance the needs of this case against the burden of searching through scores of non-responsive and irrelevant documents.

Basically, it can be a labor intensive, pain in the ass process, and they’re struggling.

The parties have gone to the court asking to adjust the schedule for the court case because discovery is just taking that long. It would delay the case about 3 to 6 months for each step.

No trial date has been set.

Below ae the new proposed dates for each step:

EventCurrent DeadlineProposed Deadline
Substantial Document
Completion Deadline
August 31, 2026November 27, 2026
Fact Discovery DeadlineOctober 31, 2026February 26, 2027
Deadline for Dispositive PreTrial MotionsNovember 30, 2026April 15, 2027
Deadline for Responses to
Dispositive Motions
December 30, 2026May 21, 2027
Deadline for Replies IFSO
Dispositive Motions
January 13, 2027June 18, 2027
Dispositive Motions HearingFebruary 17, 2027July 9, 2027

You can read the court filings below:

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ABC has filed a First Amendment lawsuit against the FCC’s “Deeply un-American” Censorship

ABC and Disney are taking the fight to the FCC and the Trump Administration for what it calls a “retaliatory campaign against ABC for a single reason: it disapproves of what ABC broadcasts.

Earlier this year, the FCC, and thus the Trump Administration, began to threaten ABC and its parent company Disney over speech that aired on the channel it disagreed with. ABC was directed by the FCC to file early renewals for its licensed TV stations, applying to eight affiliate stations owned by ABC. The FCC, and its chair Brendan Carr, were also investigating Disney for its “DEI practices,” claiming “possible violations of the Communications Act of 1934 and the FCC’s rules, including the agency’s prohibition on unlawful discrimination.”

Unlike other media companies and businesses that have caved to threats from the administration (including pretty obvious settlement bribes to Trump charities), Disney and ABC are fighting back, having filed a lawsuit against the FCC, its chairman Brendan Carr, commissioner Anna Gomez, commissioner Olivia Trusty, and two “John Does” also listed as commissioners of the FCC who have yet to be appointed.

In the filing, ABC and Disney highlight attacks on the channel and its talent’s free speech by President Donald Trump, using his own words and social media posts against him. It also quotes Carr who issued an ultimatum regarding on-air comments by ABC’s late-night host Jimmy Kimmel, “We can do this the easy way or the hard way. These companies can find ways . . . to take action . . . on Kimmel, or there is going to be additional work for the FCC ahead.”

ABC and Disney say they have seen increased pressure from the administration that has culminated in threats of broadcast licenses for the eight stations mentioned above and notes how early the reviews have been demanded, some not even halfway through their current license terms.

ABC also highlights this pressure has impacted programming decisions, deciding to livestream a speech by President Trump but not broadcasting it on television which resulted in President Trump calling for the revocation of the ABC owned stations’ broadcast licenses as well as NBC which also chose to not cover the speech.

Since the Commission cannot lawfully grant renewal this early, ABC and Disney are convinced a decision from the FCC, which is expected soon, will be a negative one.

The consequences of the Administration’s campaign against free speech reach well beyond ABC. If the Administration gets its way, the message to every media company in the country will be unmistakable: tell only the stories the Administration deems favorable, or face the coercive machinery of the federal government. In such a world, the press could in no way be described as free.

The FCC Chairman has left little doubt that this is his goal. He has publicly touted the Administration’s success in extracting speech-related concessions from other media companies, boasting that it has “t[aken] on the fake news media” and is “winning,” cataloguing with evident pride the perceived critical voices that have been taken off the air.

ABC and Disney are asking for the court to:

Declare that Defendants’ order requiring that Plaintiffs file early license renewal applications constitutes retaliatory action in violation of Plaintiffs’ rights under the First Amendment to the U.S. Constitution.

Enter temporary, preliminary, and permanent orders providing that Defendants, their officers, agents, and employees subject to their supervision, direction, and control are enjoined from taking any continuing or further action against Plaintiffs in relation to the early license renewal applications, including issuing a Hearing Designation Order;

Enter temporary, preliminary, and permanent orders, providing that Defendants, their officers, agents, and employees subject to their supervision, direction, and control are enjoined from taking any actions, formal or informal, to coerce or threaten Plaintiffs with sanctions in an effort to alter their exercise of editorial discretion; and

Grant such other and further relief as this Court deems necessary and just.

In their complaint, ABC and Disney lay out how threats from the White House and FCC have impacted their coverage and decisions and is an example as to why the acquisition of Warner Bros. Discovery by Paramount should be stopped. The media company has already shown its willingness to cater to Trump’s complaints and whims.

You can read ABC and Disney’s full filing with detailed history of the attack by President Trump, the White House, and FCC against the companies.

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Diamond Trustee Morgan W. Fisher Motions to Limit Future Notices

A compromise between “old” Diamond and its trustee Morgan W. Fisher and 15 publishers wasn’t the only bit of news today when it comes to Diamond’s chapter 7 process. Fisher also submitted an order limiting future notices in the case.

The order is interesting as it lays out a lot of information in the case that reminds us of the scope of the situation.

  • Diamond’s credit matrix initially consisted of almost 1,300 parties and when subscription comic book customers was added it was over 1,500.
  • 75 claims were filed for the Chapter 7 with the highest amount being Dynamic forces with $29,514,087.40 to $182 from Irish Holdings.
  • Omni Agent Solutions logged 742 claims in the main case and 71 claims concerning Diamond Select Toys
  • There were 759 unique claimants, 28 were governmental agencies.

The motion raises the difficulty and cost in notifying everyone every update about the case and there’s numerous other ways to get notifications like a Notice of Appearance and Request for Notices.

Fisher is motioning to limit notices to:

  • Counsel for the Debtor;
  • The Trustee and his counsel;
  • Secured Creditors;
  • The Debtor’s 20 largest unsecured creditors, based on filed claims;
  • The Office of the United States Trustee;
  • The Internal Revenue Service, and the Comptroller of the State of Maryland;
  • Persons who have appeared or filed a notice of appearance and request for service in the case (including persons served via CM/ECF);
  • Parties who are directly affected by a particular motion, paper or pleading.

The 20 largest creditors are:

  • Dynamic Forces, Inc.: $29,514,087.40
  • Alliance Entertainment, LLC: $10,008,534.05
  • Bandai Limited: $9,245,465.10
  • Penguin Random House LLC: $8,941,467.05
  • Passage Trading: $6,297,244.00
  • Oni-Lion Forge Publishing Group: $5,646,907.40
  • Udon Entertainment Inc.: $4,327,716.06
  • Valiant Entertainment LLC: $4,070,588.30
  • Disney Consumer Products, Inc.: $3,638,592.00
  • Creative Grand Industrial HK Limited: $2,960,931.87
  • Zenescope Entertainment, Inc.: $2,360,907.16
  • Fantagraphics Books Inc.: $2,279,330.68
  • MegaHouse Corporation: $2,150,730.00
  • Magnetic Press LLC: $1,957,576.53
  • TMP International, LLC: $1,774,558.48
  • Aftershock Comics, LLC: $1,767,573.53
  • ARA, Inc.: $1,229,027.36
  • Funko, LLC: $1,206,854.62
  • Action Figure Authority Inc.: $1,200,000.00
  • Hasbro, Inc.: $1,185,638.23

They’re also looking for permission to pay for the notifications without having to ask permission for each time they need to do so.

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Diamond’s Trustee Morgan W. Fisher and some Publishers Reach a Settlement over Consigned Goods

It’s a hell of a new comic book day as court documents have been released as to a settlement between Diamond‘s trustee Morgan W. Fisher and a group of publishers concerning consigned goods being held by Diamond and Sparkle Pop.

To catch folks up, when Diamond declared bankruptcy, it held a large quantity of product in its warehouse that was on consignment. After some time, Diamond claimed it had a right to sell the consigned goods to help pay down its debt and that nothing would go to the publishers. The publishers claimed it was their property and that when Diamond declared bankruptcy it triggered a whole bunch of different things that would allow them to get their product back. This has gone on for about a year and a half that resulted in all sorts of off-shoot lawsuits and a lot of behind-the-scenes negotiations.

To make things even more complicated, some items were sold when they weren’t supposed to. Sparkle Pop, the company that took over “old” Diamond, deposited $840,151.00 into an account of which $669,410.00 represents sales of goods from the Consignment Group. In addition, Sparkle Pop has $417,496.00 for sales after May 15 2025 through February 13, 2026 of which $273,503.00 represents sales of the Consignment Group’s goods. Of that initial amount of the $669,410, $50,000 will go to the publishers with $619,410 going to the trustee but what is in escrow and owed to the other publishers not part of this group needs to be figured out and settled. The $273,503 will go entirely to the trustee. If it’s found Sparkle Pop sold even more than what’s known, the publishers need to pursue that at their own cost and 5% of any recovery from that would go to the Diamond trustee after expenses for the legal proceeding are handled.

Now, we have a resolution, a “compromise,” and from the cursory read, it seems like it’s pretty much what we expected the result to be.

The compromise in short is that a certain group of publishers will get some money for the product of theirs sold and will be able to get the product back but they’ll need to pay for packing and shipping. The compromise is similar to a deal cut between Image and Diamond (the money is the difference between the two).

What’s also big is that it terminates any distribution agreement that currently exists for these publishers with “old” Diamond. This in particular stands out:

The Trustee agrees and acknowledges that the Consignment Group Members were the owners of their respective Consignment Inventory at all times prior and subsequent to the Petition Date, and the TSA did not permit or authorize Sparkle Pop to sell, distribute or dispose of Consignment Inventory on behalf of either the Consignment Group members or the Debtors other than in accordance with the Distribution Agreements and at the Debtor’s sole and express direction.

Publishers that are part of the compromise:

Ablaze
American Mythology
Avatar Press
Battle Quest Comics
Action Lab

Drawn & Quarterly
Fantagraphics
Green Ronin Publishing
Hermes Press
Living the Line

Paizo
UDON Entertainment
Zenescope
BOOM! Studios
Dynamite Forces/Dynamite

There are some publishers who are noticeably missing from this list and have been participating in court proceedings up to this point.

The bullet points of key parts of the deal and we’ve put in bold the major ones:

  • The Court Registry Escrow not allocable to the Otherwise Represented Consignors shall be released to the Parties and distributed as follows: (a) Fifty Thousand Dollars ($50,000.00) to the Consignment Group Members that are also members of the Ad Hoc Committee (to be allocated as it/they deem appropriate); and (b) the remainder to the Trustee (thus, the net amount to be paid to the Estates is $619,410.00).
  • The Settling Parties shall jointly move the Bankruptcy Court for an order directing that Sparkle Pop release the aggregate amount allocable to each Consignment Group Member from the SP Escrow, as set forth on Schedule 3 to the Trustee.
  • If not already rejected, all Distribution Agreements of the Consignment Group Members shall be deemed rejected as of the Effective Date of the Settlement and terminated in their entirety.
  • The Consignment Group Members will have the authority and are required to retrieve any and all of their inventory from the Warehouse, bearing their own costs of picking and packing such inventory.
  • Sparkle Pop is entitled to pick and pack the inventory identified by the Consignment Group Members, at rates comparable to what the Consignment Group Members can obtain from other third parties to complete the work. If Sparkle Pop declines to do the pick and pack work at comparable rates, the Consignment Group Members are authorized to access their Consignment Inventory and remove it from the Warehouse under the timelines set forth in the Settlement.
  • The Trustee, on behalf of himself the Debtors, releases and discharges the Consignment Group Members from any and all claims, causes of actions, obligations, and damages including, but not limited to, preference claims. Similar releases from the Consignment Group Members flow to the Trustee and Estates, subject to certain claims as described herein and in the Settlement. In other words, the releases are essentially mutual.
  • The Consignment Group Members are reserving all rights with regard to any additional claims against Sparkle Pop. In the event any Consignment Group Member recovers additional funds from Sparkle Pop on account of unauthorized sales of or shortages in the Consigned Inventory in excess of the Court Registry Escrow and SP Escrow, such Consignment Group Member shall pay five percent (5%) of any such recovery to the Estates, net of any legal fees and expenses required to collect such amounts.
  • In the event Sparkle Pop obtains a judgment against any Consignment Group Member for rent, storage, or similar charges with respect to such Consignment Group Member’s Consigned Inventory stored at the Warehouse, that Consignment Group Member shall have an Administrative Claim against the Estates in an amount equal to 25% of such claim.
  • In the event Sparkle Pop or the Consignment Group Members obtain a finding that any consignment inventory delivered by any Consignment Group Member was unreported as being sold by the Debtor prior to the Settlement, but was in fact sold by or at the Debtor’s direction, and paid to or for the benefit of Debtor, the respective Consignment Group Member(s) that delivered any such Missing Inventory shall be entitled to a chapter 7 administrative claim against the Debtors that is subordinate to certain other expenses and claims including any finally-allowed post-conversion administrative claims of Sparkle Pop, JP Morgan Chase and/or the Trustee’s professionals.
  • Within sixty (60) days after the Effective Date, the Trustee will file a notice of abandonment pursuant to Bankruptcy Code § 554 as to the Consigned Inventory.
  • Within ten (10) days after the Effective Date, the Trustee shall assign to the Consignment Group all of his rights, title, and interest, without representation or warranty of any kind, in and to the CG Adversary Proceedings as plaintiff therein.
  • Within ten (10) days after the Effective Date, (i) the Trustee will file a notice of dismissal of the Denial Order Appeal (if not already resolved), and (ii) the Members of the Consignment Group, as applicable, will file a notice of dismissal of the CG Adversary Counterclaims.

But… there’s more!

The Consignment Group Members are entitled to file a “substantial contribution claim” for their legal fees and costs having to do with this fight.

Other consignors who are not part of this settlement as settling parties have to reach a resolution with the Consignment Group Members and its counsel on a fee and expense sharing arrangement. But, the Trustee and other consignors who are not part of this agreement could reach their own settlement.

What’s big, and why we thought there would be a settlement, it ends Sparkle Pop charging “old” Diamond and its trustee in what’s described as a “burdensome administrative cost.”

The Parties believes the Settlement is in the best interest of the Estates. It eliminates a burdensome administrative cost that is being asserted by Sparkle Pop with regard to the continued storage of the Consignment Inventory at the Warehouse; it relieves the Trustee from any further involvement in the CG Adversary Proceedings of the Settling Parties and the Appeal; it provides a substantial cash infusion to the Debtors’ Estate; and it protects the Consignment Group Members from further erosion of value of their Consignment Inventory as well as prevents the flooding of the market with respect to unauthorized sales of their inventory.

You can read all of the documents below and we’ll have more as this major decision unfolds:

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Anthropic’s $1.5 Billion AI Copyright Settlement is Approved

Anthropic

A judge has signed off on the $1.5 billion settlement of a class action lawsuit against Anthropic for its misuse of their books to train their AI.

U.S. District Judge Araceli Martinez-Olguin granted the approval, the largest known settlement of a U.S. copyright case, and rejected claims that the settlement was too small.

The deal was initially approved in September 2025 by now-retired Judge William Alsup.

The lawsuit was launched in 2024 and said that Anthropic used books without permission to teach the artificial system, Claude.

The ruling was a bit mixed in that some of the use was ruled as fair use but the company was nailed for saving more than 7 million pirated books into a “central library.” A trial was scheduled for December.

Authors and other copyright holders filed claims covering over 92% of the more than 480,000 works included ​in the settlement, an attorney for the authors said during a court hearing.

Some authors believed the settlement was not large enough and that the attorneys were receiving too much from the settlement. The attorneys were receiving more than $101 million of their $187.5 million in their requested fees.

Separate lawsuits have been filed by authors who have opted out of the settlement.

Sparkle Pop’s Motion for Relief is Denied Without Prejudice

Red stamp with the word 'DENIED' prominently displayed.

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 motionfor 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.

Expeditors International of Washington gets its Administrative Expenses Approved in Diamond’s Chapter 7 Case

It’s been rather quiet when it comes to Diamond‘s chapter 7 process. Our alerts have been filled up with notices of returned mail… and not much else. But, today saw a little bit of news with one order approved by the court.

Expeditors International of Washington has had its administrative expense claim approved. There was no objections to the motion according to the approval. Expeditors International of Washington is a logistics company.

The company will receive their claim amount of $266,855.15.

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