Lawsuits Archives - Page 4 of 29

Category Archives: Lawsuits

Boom Entertainment Renews their Request for their Consignment Stock with some New Revelations

Posted on March 16, 2026 by Brett

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.

Boom Entertainment has filed a motion today to renew their call that they get their consigned goods back.

Like the other filings, Boom Entertainment’s goes over the agreement as far as Diamond and their role when it comes to consigned goods. But, there’s some previously raised issues as well as new ones.

Here’s the highlights:

1) Diamond has not adequately secure the stock as evidenced by the fact that Sparkle Pop, LLC (“Sparkle Pop”) sold it after the Debtor sold its other assets to Sparkle Pop (which expressly excluded the Stock) and then did not remit the proceeds,
2) …the Debtor’s failure to comply with virtually any of its obligations under the Distribution Agreements while nevertheless holding the Stock hostage in the Mississippi warehouse controlled by a third party is causing significant loss and waste, because much of the stock loses value over time.
3) Notably, the Debtor filed the Consignment Litigation only with regard to stock provided by Boom, the Consignors, and another group of consignors constituting approximately thirteen (13) other publishers. For the vast majority of other publishers that own stock sitting at the Debtor’s warehouse, the Debtor failed to commence adversary proceedings and apparently does not seek any finding that Secured Lender’s lien attached to that stock. It is unknown what the Trustee proposes to do with the stock that is not subject to the Consignment Litigation.

Here’s where Boom’s motion gets interesting and stands out from others:

1) Boom’s distribution agreement was terminated prior to the Petition Date
2) Boom has growing concerns that its Stock is being stored unsecurely. Section 3 (c) of the Distribution Agreements require that, “Buyer will warehouse Products on consignment in a clean, dry, secure, and fire protected facility.” Section 8(c) further provides, “[Diamond] shall maintain all insurance with respect thereto in amounts sufficient to fully cover all of [Consignor’s] Products stored there.” (this is a concern raised by others – Brett)
3) However, according to statements made by the Trustee at the hearing held before this Court on February 26, 2026, the Debtors’ insurance coverage on the Stock has lapsed, in breach of the requirements under the Distribution Agreements.
4) The Debtor’s estate is also not current on stock fees and warehouse storage fees owed to Sparkle Pop. The Consignors believe that Sparkle Pop has not been paid since approximately November 2025, and thus Boom is stuck in limbo with their Stock held hostage at a warehouse that the estate no longer owns, rents, or is current with respect to ongoing rent obligations.
5) Given that the Transition Services Agreement between Sparkle Pop and the Debtor is also now rejected, it is apparent that the estate is not storing the Stock and has no means to store it any longer.

The filing brings up again that Drawn & Quarterly purchased graphic novels by Fantagraphics which was fulfilled by Sparkle Pop in violation of a court order. They also state that Living the Line has at least 800 copies of a single title are not accounted for in any inventory report provided by Sparkle Pop.

This is concerning as the consignors in this case have been given no access to, or oversight of, their Stock for several month. The continued fulfillment of orders, without the ability to verify proper control, safeguarding, and accounting of stock is extremely prejudicial to Boom’s interests and the preservation of its value.

What’s really new is that Boom states they terminated their Distribution Agreement with Diamond in December 2024, prior to their chapter 11 filing (petition date). Boom was purchased by Penguin Random House in July 2024 and PRH is a distributor themselves.

Boom has also been exposed to potential claims related to their Stock still held in the Olive Branch Warehouse. Boom ran a Kickstarter3 campaign that in addition to the new content it was developing, the purchase tiers included add-ons that purchasers could buy in order to further support the Kickstarter efforts. These add-ons consisted of a number of pieces of Boom’s existing content held by Diamond.

Now, with Boom’s Stock still being held hostage in 2026, they have not been able to ship these add-ons purchased by Kickstarter supporters, leading to a number of disgruntled customers and exposing Boom to legal claims for failing to deliver the products sold through Kickstarter.

It’s yet another recent filing making a pretty strong case to have the consignment stock returned and question Diamond and Sparkle Pop’s inventory management practices.

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Diamond Chapter 11

Diamond Chapter 7 Trustee Claims No Undisclosed Agreements with Creditors after Goodman Games raises questions

Posted on March 16, 2026 by Brett

The Diamond Chapter 11/Chapter 7 process has been one filled with drama and it feels like you never know where it might go next. In late February, tabletop game publisher Goodman Games raised a question if there was an arrangements between the Trustee and secured creditors (most likely JPMorgan Chase Bank).

The Trustee, Morgan W. Fisher, manages the Chapter 7 process going through remaining assets, liquidating, and attempting to get the most value to pay back creditors.

In their filing Goodman Games wrote:

Goodman Games understands that there may be an arrangement between the Trustee and one or more secured creditors concerning the payment of the Trustee’s fees and expenses, whether in the form of a carve-out from collateral, a sharing of recoveries, or another similar agreement.

To the extent such arrangement exists, Goodman Games respectfully submits that it should be fully disclosed so that the Court and all creditors are aware of the nature and terms of the agreement.

Goodman Games has requested this information from the Applicant. As of the filing of this Response, the Application does not describe any such arrangement.

Goodman Games therefore respectfully requests that, to the extent any such agreement or understanding exists concerning the funding or payment of the Trustee’s professionals’ fees, the Trustee and/or Applicant provide appropriate disclosure so that the Court and parties in interest are fully informed in connection with consideration of the Application.

The bankruptcy court took the request seriously enough asking for a memorandum addressing the matter of “undisclosed arrangements with creditors for the payment of the Trustees fees and expenses.”

That memorandum has now been submitted by Fisher and states:

There are no (and were no) undisclosed arrangements with any creditors. This fact was made clear to counsel for Goodman Games prior to her filing of the Response. Attached as Exhibit A is a copy of that colloquy. In no uncertain terms, proposed counsel for the Trustee stated that “The agreement to share recoveries was approved during the chapter 11 case…” and that no agreement or use of cash collateral was “needed for payment of professional fees of our firm.” Ex.

The memorandum goes on to state that what is likely being referred to and questioned is the “Shared DIP Collateral” in the Final DIP Order. The DIP is “debtor in possession” and involves loan agreements and paying things back.

The memorandum further states:

That agreement between the chapter 11 debtors-in-possession and the DIP Lender granted the DIP Lender a first-priority, blanket lien on all assets of the Debtors, including all property of the estate and “expressly including… all … Avoidance Actions, commercial tort claims, other estate causes of action …” [Docket No. 163 at ¶ 13(b)]; provided, however, that the Lenders agreed to “share with the Debtors’ estates 50% of the net proceeds recovered from the Shared DIP Collateral until the DIP Obligations have been paid in full …” Id. “Shared DIP Collateral” is, in turn, defined in the Final DIP Order as just “the Avoidance Actions and commercial tort claims,” Id. at ¶ 11(a), and not other estate causes of action.

This, and only this, is the agreement for shared recoveries Mr. Dillworth was alluding to in his email and why he implored counsel for Goodman Games to “[r]e-read what I stated below with respect to our fees,” i.e., that no agreement or use of cash collateral was “needed for payment of professional fees of our firm.” Ex. A. Simply put, there was no undisclosed arrangement with creditors for the payment of the Trustees fees and expenses. If such an agreement had been reached with the DIP Lender (or any other party in interest) on that front, then it would have been brought to the Court for approval in compliance with the Bankruptcy Code and Bankruptcy Rules.

Where things get intriguing is Goodman Games raised the concern during what seemed like a simple filing for the Trustee to employ Stearns, Weaver, Miller, Weissler, Alhadeff & Sitterson, P.A. as bankruptcy counsel to the Trustee. That decision was delayed by the court while the concern of dealings was addressed. On March 15, Fisher submitted a new motion to defer the ruling to employ that counsel.

Since the filing of the Stearns Weaver Application, circumstances have arisen that have caused Stearns Weaver to seek to withdraw as proposed bankruptcy counsel to the Trustee.

They are being engaged in finding a replacement. It is unknown what the “circumstances” are that caused the withdrawal.

You can read the memorandum and exhibit A, and other filings below:

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Diamond Chapter 11

Discovery Plan in Diamond vs. Publishers Gets an Updated Timeline

Posted on March 13, 2026 by Brett

We brought the news in early March that there was some movement in the court case between Diamond and numerous publishers. The various parties and Diamond met on February 26 and March 3-4 in an attempt to find a resolution, the nature of the claims and defenses, to arrange disclosures, and propose a discovery plan. On March 4, there was a filing hashing out the plan for discovery, the process where documents pertaining to the case are handed over.

Discovery is the process where documents related to the case are handed over to the parties involved for them to go through as far as evidence. This can be emails, text messages, Slack messages, and can easily go into the millions of documents.

The issue is who owns the consigned goods that are still being held by Diamond. Zenescope, Action Lab Entertainment, Ablaze, American Mythology, Battle Quest Comics, Paizo, Living the Line, Herman & Geer Communications, and Green Ronin Publishing are all fighting to get their inventory back. Diamond wants to keep the inventory to be able to sell it off to pay creditors. JPMorgan Chase Bank wants Diamond to sell off the inventory so it can get paid back by Diamond. Sparkle Pop is involved because it has sold off some of the inventory when it wasn’t supposed to and currently is holding the physical product in a warehouse it controls.

An updated timeline has been released as far as the discovery plan with some slight shifts from the previous released plan.

Electronic Discovery. The parties have reviewed Rule 26(f), which, inter alia, addresses preservation of discoverable information, discovery of electronically stored information, and claims of privilege or work product protection. The parties have reviewed the Principles for the Discovery of Electronically Stored Information (“ESI”) in Civil Cases (as set forth by the United States District Court for the District of Maryland at https://www.mdd.uscourts.gov/sites/mdd/files/ESI-Principles.pdf), and will discuss the ESI Principles to agree on voluntary compliance, as appropriate. The Principal 2.03 Conference will occur on or before April 3, 2026. Documents and ESI shall be produced electronically via a mutually agreeable method such as an FTP site, and assearchable Static Images. This production protocol may be modified by mutual agreement or by court order.
Rule 26 Disclosures. Unless otherwise agreed to by the parties, the parties shall make their initial disclosures pursuant to Federal Rule of Civil Procedure 26(a)(1) on or before March 23, 2026.
Discovery. The Parties have agreed that they may propound document requests, interrogatories, and requests for admissions pursuant to the Federal Rules of Civil Procedure and the Local Rules of this Court, which response shall be made within 30 days of service. Unless otherwise ordered by the Court or agreed to by parties, the limitations on discovery set forth in the Federal Rules of Civil Procedure shall be strictly observed.
(a) Discovery Requests. The Parties shall serve all initial document requests, interrogatories, and requests for admissions on or before April 9, 2026.
(b) Agree on ESI Search Terms. The Parties will make reasonable efforts to agree on ESI Search Terms on or before April 23, 2026.
(c) Substantial Document Production Completion Date. The Parties expect to have document production substantially completed by June 4, 2026.
(d) Fact Discovery Cut Off. The Parties have agreed that, except for Rule 26(a)(1) disclosures, all fact discovery in this case shall be initiated so that it will be completed on or before July 31, 2026. The Parties have agreed that they may take fact depositions at any time prior to the expiration of the fact discovery deadline.
(e) Privilege Logs. Privilege logs shall be produced in accordance with the Federal Rules of Civil Procedure so as to be completed within five (5) business days of the related document production. Privileged communications occurring after April 29, 2025, need not be included on a privilege log.
(f) Expert Initial Disclosures. The identify of expert witness and subject matter of expected testimony, per Rule 26(a)(2)(A) and 26(a)(2)(C)(i), shall be disclosed on August 7, 2026. Any rebuttal experts, and subject matter of expected testimony, shall be disclosed on August 17, 2026.
(g) Expert Reports and Expert Discovery Cut Off. Expert reports and all other information required by Rule 26(a)(2)(B), along with any documents or information considered by the expert, shall be exchanged on September 8, 2026. Rebuttal expert reports and all other information required by Rule 26(a)(2)(B), along with any documents or information considered by the expert, shall be exchanged on September 29, 2026. All expert discovery shall be completed by October 20, 2026.
Protective Orders. The parties will submit a confidentiality order to the Court for approval on or before April 3, 2026.
Case Dispositive Motions. Any dispositive motions must be filed on or before November 3, 2026. Answering briefs in opposition thereto are due seventeen (17) days later (November 20, 2026), with reply briefs to be filed twelve (12) days after the filing of any answering briefs (December 2, 2026).
Joinder of Other Parties and Amendment of Pleadings. All motions to join other parties, and to amend or supplement the pleadings, shall be filed on or before June 19, 2026.
Pretrial Order. If this adversary proceeding cannot be resolved on dispositive motions, the Parties have agreed to file a Joint Pretrial Report within thirty (30) days of the Court’s ruling on dispositive motions.
Length of Trial. The Parties estimate that the time required to try this adversary proceeding will be 3-4 days.
Other Matters. There are no other matters that need to be raised at this time.

Based on all of those dates, we likely won’t see a court case before 2027.

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Diamond Chapter 11

Bills and Requests for Payments Pile up in Diamond’s Chapter 11/Chapter 7 Case

Posted on March 13, 2026 by Brett

One of the memorable scenes in Goodfellas was Ray Liotta talking about doing business with the mob and even when business is difficult, it comes to “fuck you, pay me.” The requests for payments are piling up and approvals being granted by the court as one chapter for Diamond ends and a new one begins. Towards the end of last year, Diamond‘s chapter 11 case converted to chapter 7 and with it, a flurry of payment requests have been coming in.

There’s also a flurry of no objections to recent requests awaiting final approval. We’ll have all of that when it’s finally approved.

Here’s the breakdown of what has been recently requested and what has been approved:

Approved/Ordered

Raymond James & Associates Inc. (former investment banker for Diamond): $42,032.50

Outstanding Requests

UPS: $332,236.30
California (for taxes): $259,724.53
Consignment Group (Priority Administrative Expenses): $1,698,360.22 total for all publishers represented

This request is from a group of publishers that have been fighting for their inventory and to get what’s owed for quite some time. The Consignment Group has said the amounts below (the total above) may be written off against the value of their inventory, what they get back can be applied towards these administrative costs. They have been paid $144,000 from Sparkle Pop’s sale, but that hasn’t been applied to their total.

Consignor	Total Admin Claim	20-Day Prepetition (12/24/24–1/14/25)	Post-Petition (1/14/25–5/15/25)	Post-Petition (5/15/25–12/31/25)
Aspen MLT, LLC a/k/a Aspen Comics	$2,490.36	$513.09	$1,977.27	$0.00
Black Mask Studios, LLC	$2,454.34	$0.00	$1,827.05	$627.29
DSTLRY Media, Inc.	$20,022.72	$0.00	$2,011.12	$18,011.60
Dynamic Forces, Inc. a/k/a Dynamite Entertainment	$830,121.64	$248,005.38	$0.00	$582,116.26
Heavy Metal International, LLC	$70,728.74	$0.00	$65,543.71	$5,185.03
Magnetic Press, LLC	$44,089.86	$9,116.96	$23,540.96	$11,431.94
Massive Publishing, LLC	$166,443.70	$22,455.00	$56,641.50	$87,347.20
Oni-Lion Forge Publishing Group, LLC f/k/a Oni Press, LLC	$221,707.11	$85,317.28	$26,080.76	$110,309.07
Panini UK Ltd.	$7,129.37	$0.00	$564.58	$6,564.79
Punk Bot Comic Books, LLC a/k/a Alien Books	$64,558.87	$0.00	$64,558.87	$0.00
Penn State University a/k/a Graphic Mundi	$59,431.00	$4,990.00	$54,441.00	$0.00
Titan Publishing Group, Ltd.	$103,314.15	$0.00	$44,301.35	$59,012.80
Vault Storyworks, LLC a/k/a Vault Comics	$1.00	$0.00	$1.00	$0.00
Dark Horse Comics, LLC	$105,867.36	$13,507.43	$92,359.93	$0.00
Total	$1,698,360.22	$383,905.14	$433,849.10	$880,605.98

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Diamond Chapter 11

Diamond Chapter 7 Trustee Appeals Time Extension for Consigned Goods Denial

Posted on March 12, 2026 by Brett

In February, the motion to extend time to “assume or reject executory contracts related to consigned goods” was denied by the court. This was the ongoing question regarding contracts between (old) Diamond and publishers regarding 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 andhere. 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.

This would also throw a wrench into plans the Trustee has proposed that would sell those consigned goods to Sparkle Pop.

Now, the Trustee, Morgan W. Fisher, has appealed to the District Court the decision to not extend the time period regarding the contracts. There have been numerous extensions already regarding the decision.

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Diamond Chapter 11

North Carolina Comic Retailer Arrest Leads to Indictment

Posted on March 11, 2026 by Brett

In November, a comic retailer was arrested, over a comic handed out during a Trunk-or-Treat event in Sunset Beach, NC. Kathleen Hinds Lincoln, co-owner of Marvelous Issues was charged and arrested by the Sunset Beach Police Department on October 31st for some of the material in the comics provided to attendees. A copy Grendel Tales: Devil’s Hammer #1 by Matt Wagner published in 1994 by Dark Horse is at the center of it all. The comic features nudity.

The case has been active since and kicked up in mid-February when an indictment was returned in the case by grand jurors. That does not mean that Lincoln is guilty, just that there’s enough evidence for the case to proceed.

The jurors for the State upon above the defendant named above their oath present that on or about the unlawfully, willfully and feloniously date(s) of offense shown and in the county did KNOWINGLY DISSEMINATETO E.H., A MINOR, WHOSE AGE WAS 6 AND THUS UNDER THE AGE OF 13 YEARS, MATERIAL TO WIT: A COMIC BOOK CONTAINING IMAGES OF MEN AND WOMAN ENGAGED IN SEXUALCONDUCT, WHICH THE DEFENDANT KNEW AND REASONABLY SHOULD HAVE KNOWNTO BE OBSCENE WITHIN THE MEANING OF NCGS SEC 14-190.. THE DEFENDANT WAS 59 YEARS OLD ON THE DAY OF OFFENSE AND THUS WAS 18 YEARS OF AGE OR OLDER AT THE TIME.

With that news, an assertion for a speedy trial has been submitted by Lincoln’s attorney, an assistant public defender. Also submitted was request for a recording of all phases of the proceeding by the Court Recorder as well as a request of discovery by the defense, and a motion to sequester witnesses.

Based on the voting registration of Brunswick County where this trial is set to take place, it is rather conservative with a 2-to-1 Republican to Democrat registration which could make this a tough fight.

We’ll of course follow the case and update as it progresses.

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UPS Wants their $330,757.76 from Diamond

Posted on March 10, 2026 by Brett

Diamond is now in chapter 7 and everyone is getting their outstanding balances in so that they might get paid what’s owed them. After an initial filing introducing its lawyers, the United Parcel Service (UPS) has submitted a filing in an attempt to get the $332,236.30 it says it’s owed. That total includes $330,757.76 in shipping services and additional $1,478.54 in fees.

The filing isn’t just interesting for the amount, but the exhibit filed listing out the names and addresses of numerous comic shops. It also represents another bit into the apple and less that publishers might see for their claims.

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Diamond Chapter 11

Disney, Warner Bros., Universal and Midjourney Head to Judge Over Discovery Dispute

Posted on March 9, 2026 by Brett

In February, a plan was hashed out between Disney, Warner Bros., Universal, and Midjourney over discovery when it comes to their possible trial. Now, a dispute has arisen over discovery and the numerous parties need the judge to hash things out.

In June 2025, studios started to sue Midjourney. In multiple lawsuits, they claimed the AI platform was a “bottomless pit of plagiarism.” In November, Disney, Universal, and Warner Bros. consolidated their two cases into one. Their cases were similar and made similar claims against the tech company.

This case impacts the comics community as both Marvel (via Disney) and DC Comics (via Warner Bros.) are part of the plaintiffs and specifically mentioned in filings.

We haven’t see what the dispute is but will update this article with more details or a full report when a decision is made.

The date of the conference will take place on March 12.

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Disney vs Midjourney

Diamond vs. Publishers Heads into 2027

Posted on March 9, 2026 by Brett

The issue is who owns the consigned goods that are still being held by Diamond. Ablaze, Battle Quest Comics, American Mythology Productions, Action Lab Entertainment, BOOM! Entertainment, and Fantagraphics are all fighting to get their inventory back. Diamond wants to keep the inventory to be able to sell it off to pay creditors. JPMorgan Chase Bank wants Diamond to sell off the inventory so it can get paid back by Diamond. Sparkle Pop is involved because it has sold off some of the inventory when it wasn’t supposed to and currently is holding the physical product in a warehouse it controls.

We said in our recent reporting that the earliest the trial would happen is November but likely December due to holidays. Well, we were off, because there is now a “hearing on dispositive motions” is set for January 27, 2027. That’s a hearing that asks the court for a ruling before a trial begins. The trial is expected to last 3 to 4 days.

How recent moves to have Diamond’s claims over the consigned inventory dismissed by other publishers, as well as the Trustee’s proposed deal with Sparkle Pop to sell the consigned goods impacts this is unknown… but get settled, because this could go for quite a while.

Fellow is an example of one of the orders released today.

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