In January 2025, Diamond Comic Distributors filed for Chapter 11 bankruptcy. In the months since, the drama that has come out due to the proceedings has been worthy of an HBO miniseries with bids made, bids rejected, last minute switches, and now accusations of NDAs broken and corporate espionage. On June 9, 2025, Sparkle Pop, one of the winners of Diamond’s assets, filed a complaint against Alliance Entertainment and asked for a temporary restraining order. Alliance Entertainment was the original winning bidder for Diamond’s assets during the bankruptcy but pulled its bid accusing Diamond and its representatives of fraud. During San Diego Comic-Con, that initial complaint was amended with a bunch of changes.

The changes, which you can see below, seems to tighten up the language a bit as well as add some more specifics as to what Alliance is accused of and how it negatively impacts Diamond. That is likely in response to Alliance who said the initial complaint was very general without specifics and examples of what it was being accused of.

Now, Sparkle Pop has expanded its accusation surrounding the theft of trade secrets, laying out exactly what that is including “customer information,” “vendor information,” “employee information,” and “marketing information.” It goes into detail that Diamond has built up a knowledge of the product mixes that customers would be interested in and that a competitor would not know that detail, even if they knew the identity of vendors/customers. Weirdly, it mentions employee compensation as something that was a “trade secret,” when it could easily have been ascertained by just asking individuals. Conversations about salaries and salary ranges seem normal, even among competition.

It now straight up accuses Alliance of never really being interested in Diamond and instead it was all a ruse to expand Alliance’s “reach and its product portfolio.”

There’s a lot of weird statement of details too like getting a list of Diamond employees, something that can be gained from LinkedIn with little effort.

There seems to be an effort with this amended complaint to strengthen Sparkle Pop’s case, it now says that in the acquisition of Diamond by Sparkle Pop, the APA says that Sparkle Pop can now defend Diamond’s “intellectual property” and “trade secrets,” something Alliance has said Sparkle Pop had no standing to do.

What does seem new are details regarding Alliance’s hiring of former Diamond Staff. Mike Schimmel, former head of sales at Diamond, is particularly singled out. The timeline states that Schimmel resigned and only after did Sparkle Pop/Diamond send out an email firing staff. Afterwards, Schimmel obtained that email and Schimmel was not dismissed or fired by Sparkle Pop/Diamond. Further, it says the six other employees hired by Alliance were part of a list that Schimmel provided Alliance.

There does seem to be one error we found. In point 61:

“In particular, several reported that Diamond Comic had made concerted efforts to recruit and solicit Diamond Comic employees at the Los Angeles Toy Fair, held between April 28 and May 2, 2025.”

We think they mean “Alliance had made concerted efforts…”

It would really seem that the possible loss of Amazon as a client is what Diamond/Sparkle Pop is scared of. It’s called out in point 68 and 69 and has been mentioned before.

You can keep up with the full history, including a timeline, of Sparkle Pop vs. Alliance here. You can read the new amended complaint below as well as the “red line” version which shows everything that has been changed from the initial complaint.

Overall, the new amended complaint feels like it’s a bit more focused, a stronger argument, with more details.