Category Archives: Lawsuits

Motion to Dismiss Adversary Proceedings by Diamond against Publishers Denied

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The motion by multiple publishers to dismiss the adversary proceedings against them by Diamond has been denied by the court.

Diamond moved to filing individual court cases against publishers regarding the status of consigned goods when a stay was put on a general decision concerning the inventory. Publishers had provided Diamond with goods to sell on consignment and after the initial chapter 11 filing, there were questions as to who “owns” the inventory. Publishers obviously want their product back but Diamond wants to sell it to pay back its creditors. There’s a whole lot more to it as far as the arguments, Sparkle Pop selling some of the inventory when it had no right, and more, but that’s the basics.

The court has stated the trustee has stated a claim for the goods, which multiple publishers argued wasn’t the case. What’s interesting is the publishers argued that Diamond and its trustee not responding to the acceptance/rejection of contracts is in itself a rejection, the court states that lack of action is more a breach of contract. When one door closes another opens?

If the Agreement is treated as a rejected executory contract notwithstanding the pending appeal, rejection merely constitutes a breach of contract by the Debtor under 11 U.S.C. § 365(g)(1). As explained in the Trustee’s opposition, that breach would not automatically terminate the rights asserted by the Trustee under the Bankruptcy Code and the Uniform Commercial Code. Mission Product Holdings v. Tempnology, 587 U.S. 370 (2019). Thus, the complaint states a claim.

Below is an example of the denial by the court.

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Court Denies Motions by Publisher to Regain Consigned Goods in Diamond’s Chapter 7 case… Sort Of

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There’s been a lot of different threads and drama when it comes to Diamond‘s chapter 11/chapter 7 case but one issue and fight that has gone on since nearly the beginning is over consigned goods the former distributor currently holds. Publishers had provided Diamond with goods to sell on consignment and after the initial chapter 11 filing, there were questions as to who “owns” the inventory. Publishers obviously want their product back but Diamond wants to sell it to pay back its creditors. There’s a whole lot more to it as far as the arguments, Sparkle Pop selling some of the inventory when it had no right, and more, but that’s the basics.

Diamond is now in chapter 7 and they and its trustee were given a deadline to accept or reject its contracts with publishers. Diamond’s trustee asked for an extension of that deadline and was denied by the court. That denial is currently in appeal.

Because Diamond and its trustee didn’t file, that set off a flurry of filings by publishers that the lack of response should count as a “rejection” and if the contracts are rejected that sets off a process by which the publishers can get their goods back. In multiple filings, they argued with the court, they want their goods back for multiple reasons beyond the lack of acceptance/rejection of the contracts. Of course Diamond’s trustee and more filed they disagreed with that.

The court has now ruled on two of the three motions filed (and we expect the same ruling for the third) denying the motion to get the consigned goods back, but it’s not quite a denial.

The denial comes with this bit:

WITHOUT PREJUDICE to renewal of the motion upon resolution of the Trustee’s appeal of this Court’s Order Denying Emergency Motion to Extend Time to Assume or Reject Executory Contracts Related to Consigned Goods [Docket No. 1171]. For the avoidance of doubt, the Court expresses no opinion by entry of this Order on whether 11 U.S.C. § 365(g) permits the relief sought in the motion prior to resolution of the pending adversary proceedings regarding application of the Uniform Commercial Code.

In other words, it’s denied right now, but once the appeal about the time extension is decided, it can be filed again. In short, the appeal is going on and since that’s kind of a big deal and would impact this, it’s a bit early to decide things. This also allows publishers to refile with an updated argument/reasoning once that appeal comes back.

You can read both filings below:

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The Consignment Group files their Support for the Ad Hoc Committee’s Motion to release Consigned Stock in Diamond’s Chapter 7 Case

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The Consignment Group, which consists of Aspen, Black Mask, DSTLRY, Dynamic Force/Dynamite, Heavy Metal, Magnetic Press, Massive Publishing, Oni-Lion Forge, Panini, Alien Books, Graphic Mundi, Titan, Vault Comics, and Dark Horse, have submitted a response/joinder to the court in support of the Ad Hoc Committee‘s motion for the court to release consigned stock currently held by Diamond.

One of the biggest fights during Diamond’s chapter 11/chapter 7 process has concerned consigned goods provided by publishers and currently held by Diamond and stored by Sparkle Pop. In short, Diamond believes they “own” the product and can sell the goods to help pay off its debts. Of course, the publishers wants their goods back.

In their response/joinder, the Consignment Group argues:

  1. The publishers have a distribution agreement with Diamond for the goods on a consignment basis, but the publishers own the inventory,
  2. If the distribution agreement is terminated, the goods need to be returns,
  3. Diamond currently has a lack of “adequate storage,” has let insurance lapse, and the goods are still being sold unauthorized,
  4. The stock is losing value and publishers aren’t able to distribute the product through other ways which is causing issues with consumers as well as contractual claims,
  5. The distribution agreement has been terminated/rejected and because of that, the goods should be immediately returned,
  6. Some consigned goods were provided after Diamond’s chapter 11 process began, so the trustee doesn’t have claim to that.

They’re asking the judge to grant the Ad Hoc Committee’s relief and release the consigned inventory, as well as any other relief the Court deems just and proper.

You can read the full filing below.

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Diamond’s Chapter 7 Trustee Objects to the Release of Consignor’s Stock

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Diamond’s Chapter 7 Trustee Morgan W. Fisher has filed a motion objecting to the motions by multiple publishers to release consigned stock still held by Diamond.

Fisher lays out five reasons that the millions of dollars worth of consigned inventory shouldn’t be turned over:

  1. the estate’s priority interest in the consigned inventory was fixed by federal law on the Petition Date and no post-petition event can divest it;
  2. neither rejection under § 365 nor the Agreement’s termination provisions revest title in the Consignors;
  3. granting the Motion would circumvent this Court’s own ruling
  4. requiring adversary proceedings to resolve title;
  5. the legal predicate for the Motion — deemed rejection as of February 17, 2026 — is currently on appeal; and
  6. practical obstacles, including a potential warehouseman’s lien and commingled inventory, make the relief unworkable.

This argument has been one that has been waged through most of Diamond’s chapter 11/chapter 7 process. Diamond has stock provided by publishers to sell through consignment. Diamond claims specific processes weren’t followed by publishers to protect that stock during the chapter 11 process and Diamond should be able to sell it to pay back its creditors. Publishers of course want their stock back and recently argue that Diamond and its trustee missed a deadline to assume or reject contracts with publishers and thus they default as rejected and part of that rejection is publishers getting their stock back.

There’s currently about three dozen adversary proceedings between Diamond and publishers to determine the ownership of the stock. If the publishers’ requests are granted, these proceedings would likely end.

Also, the trustee has appealed a decision to not extend the date to accept or reject existing contracts between Diamond and publishers which is part of the publishers’ recent motions.

You can read the motion below which goes into greater detail in Fisher’s arguments about the issue. You can check out all of our coverage including more in-depth details on the above here.

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Midjourney Files a Motion to Compel against Disney and Warner Bros. in AI Fight

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While the comic world is mainly focused on the court drama that is Diamond’s chapter 11/chapter 7, we’ve also made sure to keep track of other major cases making their way through the courts. One that may have just as big an impact on the world of comics is the lawsuit by Disney, Universal, and Warner Bros. Discovery against Midjourney.

In June of 2025, Disney and Universal launched a lawsuit against Midjourney over what they called its “bottomless pit of plagiarism” that generates “endless unauthorized copies.” Warner Bros. Discovery launched their lawsuit in September for similar reasons, and those two separate lawsuits were combined in November.

Marvel and DC Comics are both named as plaintiffs in the lawsuit with characters from each being used as examples of Midjourney’s theft.

The parties have been figuring out discovery in the case, the part where they each hand over relevant documents to each other so they can go over evidence. Documents can be relevant emails, text messages, memos, etc. Discovery has been a bumpy process with a place hashed out in February and then a dispute happening March that went before the judge.

Now, Midjourney has filed to compel the complainants to produce further documents in response Midjourney’s Requests for Production (the process of getting the documents during discovery).

In other words, Midjourney believes Disney, Universal, and/or Warner Bros. Discovery are holding back documents or there’s more documents than what they’ve received. Midjourney is asking a judge to step in to make them hand over more documents to Midjourney. This is a pretty big action, much like going to a teacher to settle a dispute you should be able to have handled yourselves.

In the world of discovery, this is potentially a big deal and shows this court case might be having some drama and animosity behind the scenes.

Below is the main motion and we’ll update with more supporting documents when we can.

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Diamond’s Chapter 7 Trustee Lays Out Relevant Documents in Appeal Attempt

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There’s been some major changes recently in Diamond’s Chapter 7 case. The Trustee who is overseeing the Chapter 7 case had asked for an extension of a deadline to figure out how to respond to rejecting/accepting Diamond’s contracts and in February that request for an extension was denied. The denial of the motion by the Trustee has caused a chain of rejections. Because the contracts were not assumed or rejected by the deadline, publishers have pounced citing law that saws the contracts default to rejected. You can read about that here and here. Because the contracts are rejected, there’s laid out steps in the contracts as to what happens to consigned goods, primarily the publishers can get them back for the cost of shipping.

The Trustee has appealed the decision to not extend the due date to make a decision, very important because with the deadline for a decision passing and none made, things might have tipped in publisher’s favors.

Now, a list of documents has been filed the Trustee feels are relevant for the appeal and we’ve collected links to all of the documents below so you can read them yourself.

Filing DateDocket #Document
12/19/20251089Order (I) Approving Eighth Stipulation Between Debtors and JPMorgan Chase Bank, N.A. Amending DIP Credit Agreement, (II) Converting Cases From Chapter 11 to a Chapter 7 of the Bankruptcy Code as of Conversion Date, (III) Approving Certain Conversion Procedures (IV) Setting Bar Date for Filing Final Chapter 11 Fee Applications and Establishing a Hearing Thereon, And (V) Granting Related Relief (related document(s).
12/23/20251095Appointment of Chapter Trustee: The U.S. Trustee, pursuant to 28 U.S.C. Section 586, hereby appoints Morgan W. Fisher to serve as the Chapter Trustee in this case. This case is covered by the blanket bond for the hereby appointed trustee.
1/15/20261114Amended Notice of Chapter 7 Bankruptcy Case, Meeting of
Creditors & Notice of Appointment of Interim Trustee.
2/19/20261156Emergency Motion to Extend Time to Assume or Reject Executory Contracts Related to Consigned Goods Filed by Morgan W. Fisher.
2/19/20261157Emergency Motion to Shorten Time in which to respond to the Emergency Motion to Extend Deadline to Assume or Reject Executory Contracts Related to Consigned Goods and Set Expedited Hearing Thereon.
2/19/20261158Order Granting Motion to Shorten Time in Which to Response to Trustee’s Emergency Motion to Extend Deadline to Assume or Reject Executory Contracts Related to Consigned Goods and to Set Expedited Hearing Thereon.
2/25/20261163Objection on behalf of Aspen MLT, LLC /a/ka Aspen Comics, Black Mask Studios, LLC, Dark Horse Comics, LLC, Dynamic Forces, Inc., Heavy Metal International, LLC, Magnetic Press, LLC, Massive Publishing, LLC, Oni-Lion Forge Publishing Group, LLC f/k/a Oni Press, Panini UK, Ltd., Punk Bot Comic Books, LLC a/k/a
Alien Books, The Penn State University a/k/a Graphic Mundi, Titan Publishing Group, Ltd., Vault Storyworks, LLC a/k/a Vault Comics f/k/a Creative Mind Energy.
2/25/20261164Objection on behalf of Ad Hoc Committee of Consignors Filed by Catherine Keller Hopkin (related document(s)1156 Motion to Extend Time filed by Trustee Morgan W. Fisher). (Attachments: # 1 Exhibit A: 2-11-26 email # 2 Exhibit B: 1-14-26 email).
2/25/20261164Joint Line (2nd) Regarding Motion To Extend Deadline To Assume Or Reject Executory Contracts Related To Consigned Goods on behalf of Morgan W. Fisher.
2/25/20261165Joint Line Regarding Motion To Extend Deadline To Assume Or Reject Executory Contracts Related To Consigned Goods on behalf of Morgan W. Fisher
2/26/20261171Order Denying Emergency Motion to Extend Time to Assume or Reject Executory Contracts Related to Consigned Goods
3/4/20261185Transcript of Hearing held on February 26, 2026

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The Lawyers Behind the $1.5 Billion Anthropic Settlement Slash their Fee Bid after Pushback

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Anthropic

In December 2025, the lawyers behind the $1.5 billion settlement requested $302 million in fees and expenses from the court for their work during the lawsuit against Anthropic for use of copywritten material to train its AI model.

The lawsuit was over the artificial intelligence platform Anthropic’s use of copywritten material. The settlement includes $1.5 billion, about $3,000 for each instance of use. If an author has 3 books that were used by Anthropic, they’d receive $9,000 as an example.

The plaintiff’s lawyers asked a federal judge for $300 million in attorney fees plus expenses of about $1.97 million and $17 million reserve fund for future expenses in December 2025. That’s around 20% of the settlement. There was also a request of $50,000 for each of the three named plaintiffs in the case. $75 million of the $300 million would have gone to three firms, Cowan DeBaets Abrahams & Sheppard, Edelson, and Oppenheim + Zebrak, while the rest would have gone to Susman and Lieff Cabraser.

That amount received pushback and was objected to and that request has been lowered.

Law firms Susman Godfrey and Lieff Cabraser asked the federal court in San Francisco to award them 12.5% of the settlement fund, or $187.5 million.

The final approval of the settlement will be considered during an April 23 hearing. A preliminary approval happened in September 2025.

Diamond’s Adversary Proceeding Complaint Dismissal Response gets a March 30 Deadline

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Diamond Comic Distributors

Diamond‘s chapter 11/chapter 7 drama has had a lot of twists and turns in recent weeks. There’s been multiple requests by publishers to get their consigned goods back, accusations of selling consigned goods when they shouldn’t have been sold, and more. One of the bigger motions has been an attempt by numerous publishers to dismiss the adversary proceedings between Diamond and the publisher.

One of the biggest fights during Diamond’s chapter 11/chapter 7 process has concerned consigned goods provided by publishers and currently held by Diamond and stored by Sparkle Pop. In short, Diamond believes they “own” the product and can sell the goods to help pay off its debts. Of course, the publishers wants their goods back.

A decision as to who owns the product was put on hold by the court and Diamond was offered the option to sue each individual publisher, which they did. Those lawsuits have played out for over half a year at this point.

One small detail of that fight involves Diamond’s contracts with the publishers which Diamond had to accept or reject during the chapter 11/chapter 7 process. A deadline for that decision came and pass with Diamond making no decision. The publishers have since motioned saying that counts as a rejection, the goods are theirs then, and the adversary proceedings should be dismissed.

Numerous filings were released today setting the date for Diamond and its counsel to respond to that motion to dismiss the adversary proceedings as March 30, 2026.

Publishers included in today’s filings include Aspen, Black Mask Studios, Dark Horse, DSTLRY, Dynamic Forces, Heavy Metal, Magnetic Press, Massive Publishing, Oni Press, Panini, Alien Books, Titan Comics, and Vault Storyworks.

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Diamond’s Chapter 7 Process Gives Us Updates on Humanoids’ Chapter 7

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Humanoids

2025 was an odd year for the comic industry as it found itself inside court rooms in multiple high profile cases. One of those occurred in October 2025 when Humanoids filed for Chapter 7 bankruptcy in Delaware Bankruptcy Court. In their filing, the publisher referenced the Diamond bankruptcy, and now, in a recent filing, we get some information in Diamond’s process about Humanoids in return.

In the filing from March 17, Humanoids transfers its claim to a new entity. Humanoids is one of the publishers fighting Diamond for what’s owed.

In the filing, Humanoids, lnc. is being transferred to Humanoids Studios SA, located in Geneva, Switzerland.

This change took effect on October 10, 2025, the closing date of all of the asset sold with a transfer agreement dated October 9, 2025.

According to the Diamond filing, Humanoids Studios SA is the sole owner of the transferred assets and related rights.

The Transferred Assets consist of(i) all intellectual property of Humanoids, Inc. (including books. comic books. scripts. and screenplays, and all related agreements with their respective authors). (ii) all trademarks, domain names, and website URLs, (iii) all equipment and inventory (including book inventory) used in the Company’s business. (iv) all cash, advances on royalties made to authors. and accounts receivable ofthe Company. and (v) all other assets of the Company, including its equity interests in its subsidiaries, together with all assets of Humanoids Development, LLC that were merged into the Company on October 7. 2025.

Michel Schnegg is listed as the “Director” of Humanoids Studios SA. Schnegg is a mysterious figure with little on the web beyond some social profiles, this website, and a LinkedIn profile where he’s currently listed as the “Directeur artistique principal” of Art éditions Suisse since December 2018.

The Art éditions Suisse Association upholds a socially conscious vision of publishing, prioritizing 100% local and artisanal production. Specializing in fine books and heritage journals, AES transforms your projects into collector’s items in which the quality of printing and binding reflects a commitment to ethical standards. By collaborating exclusively with partners in French-speaking Switzerland, AES ensures a short supply chain that minimizes environmental impact while celebrating the craftsmanship of our region. This sustainable and responsible approach enables us to guide you in creating authentic works—designed to endure and to honor the richness of our heritage.
Rooted in dialogue and the transmission of knowledge, AES places its expertise at the service of your publications, transforming them into enduring, ethically produced benchmarks.

From their website, L’Association Art éditions Suisse is a non-profit association (since 2025) publishing label which was launched in 2019 which draws on the expertise of exclusively French-speaking Swiss companies, specifically those based in Geneva: Éditions Slatkine for distribution, Atelier Schnegg+ for graphic design, layout, and digital production, and ATAR Roto presse SA for printing and binding. All are also known for their ethical work practices, including fair wages and apprenticeships.

Humanoids’ situation has been an odd one with their US chapter 7 listing $17 million in debt and $0 in assets, but, it’s still doing business having reorganized under a new company with a new parent that owns all of the publishing assets without the debt. The Beat has more information on all of that.

Their claim is for $7,90976 filed on February 20, 2025.

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JPMorgan Submits a Limited Objection to Recent Consignment Stock Motions

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In February, the motion to extend time to “assume or reject executory contracts related to consigned goods” was denied by the court in regards to Diamond‘s chapter 11/chapter 7 process. This concerned the ongoing question regarding contracts between (old) Diamond and publishers handling consigned goods. Who “owns” those goods is a contentious issue with publishers wanting their product back while Diamond, and now their Trustee, want to be able to sell the consigned goods to pay back creditors.

The denial of the motion by the Trustee has caused a chain of rejections. Because the contracts were not assumed or rejected by the deadline, publishers have pounced citing law that saws the contracts default to rejected. You can read about that here and here. Because the contracts are rejected, there’s laid out steps in the contracts as to what happens to consigned goods, primarily the publishers can get them back for the cost of shipping. Sparkle Pop also filed a response as well as Boom Entertainment.

Now, JPMorgan Chase Bank has filed their thoughts as they’re the lender to (old) Diamond.

They bank has filed a limited objection, supporting a “consensual resolution that avoids unnecessary litigation” as long as that protects JPMorgan’s rights and interests including its DIP liens and protections under the Final DIP Order.

It does object to the publishers’ various motions to end the adversary proceedings between (old) Diamond and them and get a decision from the court regarding the court without those adversary proceedings continuing.

JPMorgan goes back to using early arguments that non of the publishers filed a UCC-1 financing statement that’d have protected them during (old) Diamond’ chapter 11. That ignores that the contract between Boom Entertainment and (old) Diamond ended in December 2024, before Diamond’s chapter 11 filing.

JPMorgan is requesting the court deny the various motions by the publishers concerning the consigned goods, allow the Trustee’s appeal regarding the consigned goods be resolved, and make sure JPMorgan’s interests are acknowledged in any decisions made.

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