In their lawsuit against Alliance Entertainment, Sparkle Pop motioned for a “temporary restraining order and preliminary injunction.”

The motion was made to prevent Alliance Entertainment from:

1. soliciting current employees of Diamond Comic and continuing to employ former employees of Diamond Comic;
2. soliciting or attempting to solicit any current or former employees of Diamond Comic;
3. soliciting or entering into any business relationships with Amazon or other parties with respect to business involving the Diamond Comic assets; and
4. retaining or making any use of Diamond Comic confidential information or Trade Secrets.

Sparkle Pop is accusing Alliance Entertainment of violating its non-disclosure and non-solicitation agreement that Alliance signed when it bid for the assets of Diamond Comic Distributors.

Sparkle Pop in their motion claims that:

1. Defendants have hired seven key former Diamond Comic employees critical to the continuing operations of the Diamond Comic business acquired by Sparkle Pop;
2. Defendants have abused confidential information and trade secrets of Diamond Comic to unfairly compete with Diamond Comic;
3. Defendants have used the confidential information and trade secrets of Diamond Comic to reach out to vendors and customers of Diamond Comic in violation of the non-disclosure and non-solicitation agreement that Alliance signed as a prospective bidder;
4. Sparkle Pop is being irreparably harmed by Defendants’ actions; and
5. absent injunctive relief, Sparkle Pop lacks an adequate remedy at law for Defendant’s actions.

Further, Sparkle Pop is asking to be award damages that’ll be determined during a trial.

In their motion Sparkle Pop says that as part of the prospective purchasing process, those involved had to sign a non-disclosure and non-solicitation agreement with Diamond, which is claimed that Alliance did.

Interestingly, Ad Populum, which is Sparkle Pop’s parent company, signed their NDA on October 26, 2024, which indicates that Diamond was looking for a buyer long before it declared bankruptcy on January 14, 2025.

Among information provided after the NDA was the identity of key employees, critical customers and suppliers, and financial information.

For those that might not remember, Alliance Entertainment initially won the bidding process but Diamond attempted to switch to a team-up bid by Universal Distribution and Ad Populum, which Alliance submitted a complaint about, before Alliance won the bid again and then rejected it due to a claim of fraud which is still being litigated.

Sparkle Pop in their motion claim that on May 16, 2025, Mike Schimmel who was the head of sales at Diamond resigned to go work for Alliance Entertainment. Around May 23, 2025, six other “key employees” in sales and purchasing gave one week’s notice and then went to work for Alliance Entertainment. Sparkle Pop says that those employees had access to “critical Diamond confidential information and trade secrets” like customer lists, vendor lists, and sales data. Diamond’s customer data was already released in an earlier court filing so anyone can have that now. Those employees also had bits about non-disclosure of Diamond’s confidential information in their employee manual which they were reminded of when they left.

Sparkle Pop claims that Joe Lunday, who was one of the seven who left, had a call with Diamond’s Amazon representative on his last day to tell them they were moving over to Alliance and that Alliance was looking to build out their collectibles program. Alliance has made it clear this was their intention, especially during their bid for Diamond, and have their own lines of collectibles. But, Sparkle Pop claims that Lunday told the Amazon staffer than Amazon should purchase the items they had been buying from Diamond from Alliance instead (Alliance currently doesn’t offer that).

Diamond received a cease-and-desist letter from Sparkle Pop on June 2, 2025.

Sparkle Pop further states the hiring of the seven employees is a direct violation of the NDA. And that it degrades the value of the assets Sparkle Pop has purchased in the bankruptcy process. Sparkle Pop has closed multiple divisions of Diamond that it purchased and laid off numerous key employees undermining this argument. They claim these particular employees were critical.

You can read all of the motions below: