Tag Archives: ad populum

Sparkle vs. Alliance? Yeah, that’s still going on too!

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Diamond‘s chapter 11 process has spun out enough drama that it’s worthy of a television miniseries. There’s multiple lawsuits dealing with it and of course a fight over the chapter 11 process itself. One of those is Ad Populum/Sparkle Pop, one of the winners of Diamond’s assets, suing Alliance Entertainment (one of the bidders) over broken NDAs and corporate espionage. That lawsuit launched in June 2025 with our last update in late July. So, let’s catch up!

Alliance attempted to dismiss the case which was opposed by Sparkle Pop with Diamond submitting more to try and support their motion.

A pretrial conference was held on November 10, 2025 to discuss the amended complaint by Sparkle Pop against Alliance as well as the motion to dismiss things and the opposition to that.

In early November, Alliance Entertainment motioned for sanctions in the “form of attorney’s fees and expenses, and for such other and further relief as
the Court may deem just and proper.”

In the motion, Alliance calls Sparkle Pop’s action “frivolous” and points that Diamond has its own claim for breach of the NDA against Alliance, so Sparkle Pop can’t have the right to do that. If Diamond can sue Alliance for breaching the NDA, then Sparkle Pop doesn’t is the short of it.

But, that didn’t last long because Alliance withdrew their motion for sanctions less than a week later…

Alliance was then informed November 14 they were missing their “Corporate Ownership Statement” and if it wasn’t filed by December 1, the case could be dismissed.

On the same day, an order was released denying Alliance’s motion to dismiss the lawsuit.

And to add to the fun, on November 17, 2025, Sparkle Pop was also informed they didn’t have a “Corporate Ownership Statement” and if it’s not filed by December 1, the case would be dismissed.

In a Thanksgiving treat, Alliance filed their answers to the amended complaint where they agree with or disagree with what Sparkle Pop claims in their complaint. Basically, are there basic facts they can agree on.

Sparkle Pop’s statement of ownership was eventually filed December 1. It states that Qanah Co, Inc. owns 10% or more interest in the company and there’s three other limited liability companies and one individual that make up Ad Populum and somehow doesn’t know the citizenship of that individual member.

Also on December 1, a discovery plan was submitted by the counsels.

That ownership document about Sparkle Pop? That got amended… they spelled the name of one of the owners incorrectly. It’s Qavah not Qanah.

So where do things stand? A final pre-trial conference is set for August 6, 2026 with a list of exhibits and witnesses to be filed at some point in the future.

Sparkle Pop Updates the Court on the Status of its Consignment Sale Proceeds During Diamond’s Chapter 11 Process

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Steven Bieg, the Chief Financial Officer of Ad Populum which is the parent entity to Sparkle Pop has provided an update as to the status of money gained through the sale of consigned inventory they weren’t supposed to.

For those who don’t know the details, during Diamond’s Chapter 11 process there’s bunch of consigned inventory. That inventory is under dispute by Diamond and the publishers of that product. After its purchase of Diamond’s assets, Sparkle Pop had sold some of that consigned inventory. Diamond then took Sparkle Pop to court to get a court order for them to stop, they said they already had, and a decision to be made as to what to do with the money. The decision was the proceeds were to be paid into the Registry of the Court and would be held until other disputes have been decided.

Sparkle Pop had generated sales of $1,051,575 before May 15, 2025 and $515,866 after May 15, 2025, a total of $1,567,441.

In the update, Bieg states some of the sold product has been returned. There’s also the fact that payment schedules have varied so paying it all is rather difficult since Sparkle Pop hasn’t been paid for it all.

As of September 5, 2025, Sparkle Pop had processed returns of Consigned Inventory received before May 15, 2025 representing $316,926 in total sales. Accordingly, as of September 5, 2025, Sparkle Pop had collected $778,171 in proceeds net of returns in connection with sales of Consigned Inventory received before May 15, 2025, or approximately 74% of the total amount invoiced and returned.

On September 17, Sparkle Pop deposited $778,171, the amount they’ve collected, to the Court Registry.

As of the date of the Supplemental Declaration, the amount of returns of Consigned Inventory received before May 15, 2025 that Sparkle Pop has processed has grown to $337,975 in total sales.

As of the date of this Supplemental Declaration, and since September 5, 2025, Sparkle Pop has collected a total of $812,416 in proceeds from the sales of Consigned Inventory received before May 15, 2025, or approximately 84% of the total amount invoiced net of returns.

On October 10, Sparkle Pop sent a check for $34,246. That makes the total deposited with the Court Registry, $812,417.

Diamond releases its Witness and Exhibit List for Wednesday’s Hearing Regarding Sparkle Pop Selling Consigned Goods

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There’s a lot of balls in the air when it comes to Diamond‘s chapter 11 process. Wednesday, September 10 is the next hearing, this one having to do with Sparkle Pop having sold consignment goods when they weren’t supposed to.

The short version, Diamond still has a lot of inventory in its possession that are on consignment. Diamond wants to sell the inventory to raise money so it can pay back its lender, JPMorgan Chase Bank. But, publishers don’t want them to and have filed been fighting to stop their motion. During that, it was revealed that Sparkle Pop had sold a bunch of the goods on consignment when they shouldn’t have.

Diamond filed a motion at the end of August to force Sparkle Pop to stop selling the inventory and also asking for some sort of damages. Sparkle Pop has said they have stopped selling the inventory and have the money set aside and waiting to be told what to do with it by the court and blamed Diamond for the issues. Then, there’s publishers who have some issues with Diamond’s motion against Sparkle Pop.

So, that’s what’s being covered on September 10.

For witnesses, Diamond has called Robert Gorin who is the co-Chief Restructuring Officer and Ramy Aly who is the Senior Director, Getzler Henrich & Associates, LC. Both will have knowledge of the agreements of the sale of Diamond’s assets to Sparkle Pop. Those assets did not include consigned goods.

As far as the exhibits, there’s various agreements, email that is likely Diamond telling Sparkle Pop to stop selling the inventory, and most importantly, the consignment inventory list. If it’s released, it’ll be the first time we’ve gotten idea as to what inventory Diamond still has access to.

The hearing will take place September 10 and 10am ET.

Check out the full list filed below:

Sparkle Pop Blames Diamond for Sparkle Pop Selling Consigned Goods, Objecting to Diamond’s Motion

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In August, the Ad Hoc Committee of Consignors, a group that represents a bunch of publishers, filed a motion in (old) Diamond‘s chapter 11 process attempting to get clarity as to who is selling consigned goods. The consigned goods are inventory that is currently at the center of a legal fight between (old) Diamond and comic and game publishers as to who “owns” them and if (old) Diamond has a right to sell the goods.

In a response to the Ad Hoc Committee’s motion (old) Diamond revealed that Ad Populum/Sparkle Pop had been selling consigned goods when they never purchased them and that (old) Diamond had told them to not do that with threats from their lawyer. Sparkle Pop was one of the winning bidders that purchased assets from (old) Diamond for their own (new) Diamond. That purchase of assets didn’t include consigned goods.

Most recently, Diamond filed a motion against Sparkle Pop wanting the court to force Sparkle Pop to stop selling those consigned goods as well as “compensatory damages and punitive damages.” It is believed to be around $1.38 million worth of inventory has been sold.

Today, Sparkle Pop responded back to Diamond’s motion objecting to it and basically pointing a finger at Diamond’s incompetency.

In Sparkle Pop’s filing, they describe themselves as being “thrusted” “in the middle of their dispute with the consignors to use as a scapegoat and to obtain interim monetary relief.”

Sparkle Pop objects to any expedited treatment of the dispute between it and Diamond because:

  1. That it is no longer selling any Consigned Inventory; and
  2. That the proceeds of any Consigned Inventory sold since May 15, 2025 have been segregated and are being held pending clear instruction or Court order regarding who is entitled to the proceeds of those sales.

In short, Sparkle Pop is admitting they sold the goods and just waiting to hear what they should do with the money gained from it. Should it go to Diamond, or as the Ad Hoc Committee has recently motioned, go to the publishers?

In our original article where Diamond pointed the finger at Sparkle Pop for selling the consigned goods, we asked how this could have happened? All it’d take was Diamond zeroing out the consigned goods in the database it handed over to Sparkle Pop to prevent this. It couldn’t be that simple, can it?

The answer is, Diamond really is that incompetent.

From Sparkle Pop’s filing, Diamond made no effort to remove the consigned goods from their website when they handed it over to Sparkle Pop.

According to Sparkle Pop, Diamond also “did not segregate, remove, transport or otherwise dispose of the Consigned Inventory from the Olive Branch, Mississippi warehouse facility that Debtors sold to Sparkle Pop.”

All of that made it difficult for Sparkle Pop to distinguish between the consigned inventory and non-consigned inventory among the commingled goods. This would also hint that Sparkle Pop didn’t inspect the inventory it purchased to make sure what was purchased was present. If they did, they would have come across inventory not on their purchase list… even if they were given a list of the purchased inventory (or could have been given a list of inventory that included the consigned goods).

Sparkle Pop in their filing say they just filed orders that came through the website that Diamond handed over to them as part of regular business. It didn’t go out of its way to sell the consigned goods.

Sparkle Pop further argues that if they didn’t sell the inventory, the consigners (aka publishers) might come after Sparkle Pop “for failing to secure value-maximizing sales in the ordinary course of business, and in continuation of the business expectations the consignors had developed during the course of their relationships with” Diamond. The goods, Sparkle Pop argues, lose value over time. So, it was in the publisher’s best interest they sell them.

Sparkle Pop then claims when it recognizes it was selling consigned goods, they put any proceeds from the sales into a separate bucket so they could eventually be given to the “rightful party.”

Further clarifying the timeline of all of this:

  • May 27, 2025 – Sparkle Pop informed vendors, including consignors, that Sparkle Pop had taken over ownership of Diamond’s assets and operating the business.
  • For a month after Sparkle Pop fulfilled orders including consigned goods placed through its website with no objection from Diamond.
  • June 8, 2025 – Diamond contacts Sparkle Pop telling them they needed Diamond’s consent to “process sales of Consigned Inventory” and Sparkle Pop should “cease honoring all sales of Consigned Inventory.”
  • Sparkle Pop was still receiving shipments of Consigned Inventory to the distribution warehouse for sale.
  • They continued to sell consigned goods with Diamond’s knowledge since they told vendors they were in charge of sales now and vendors kept sending Consigned Inventory.
  • August 2 – The Ad Hoc Committee of Consignors files their motion to find out who is selling the consigned goods.

As far as how much was sold. Sparkle Pop claims they generated:

$1,051,575 and $515,866 in revenue for Consigned Inventory received prior to Closing and after the Closing, respectively.

Sparkle Pop incurred approximately $251,897 and $181,373 in costs, including shipping, packaging, and other costs associated with honoring sales of Consigned Inventory received prior to Closing and after the Closing, respectively.

Sparkle Pop also states they expected Diamond would reimburse Sparkle Pop for the costs associated with processing the Consigned Inventory which is required under one of their agreements, the TSA, which states Sparkle Pop can process Consigned Inventory.

Read all of Sparkle Pop’s objection below as well as a declaration by Steven Bieg, the Chief Financial Officer of Ad Populum.

Today’s Diamond Chapter 11 Hearing Results in a New Hearing for September and a More Precarious Situation

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Diamond was looking to get answers this week for their motion regarding consigned products. But, it looks like things did not go the way they wanted with a partial win for publishers but a more precarious situation for all.

One of the motions being considered was a motion by a group of publishers to compel Diamond to assume or reject contracts with them. That motion has been pushing off for a hearing to be held on September 30. On that date, Diamond’s motion to sell the consigned goods will also continued to be discussed along with various objections.

Notice of Hearing (related document(s)[747] Motion to Compel filed by Creditor Dynamic Forces, Inc., Creditor Aspen MLT, LLC /a/ka Aspen Comics, Creditor Black Mask Studios, LLC, Creditor DSTLRY Media, Inc., Creditor Heavy Metal International, LLC, Creditor Magnetic Press, LLC, Creditor Massive Publishing, LLC, Creditor Oni-Lion Forge Publishing Group, LLC f/k/a Oni Press, Creditor Panini UK, Ltd., Creditor Punk Bot Comic Books, LLC a/k/a Alien Books, Creditor The Penn State University a/k/a Graphic Mundi, Creditor Titan Publishing Group, Ltd., Creditor Vault Storyworks, LLC a/k/a Vault Comics f/k/a Creative Mind Energy, Creditor Dark Horse Comics, LLC). Hearing scheduled for 9/30/2025 at 01:30 PM. In person hearing Courtroom 9-D Baltimore, Judge Rice. (Scott, Cherita)

Evidentiary Hearing Held by Video Conference: re: 531 Motion to Sell Free and Clear of Liens and Notice of Motion – MOTION STAYED; re: 679 Motion for Miscellaneous Relief AND re: 738 Objection AND re: 740 Opposition – ALL MATTERS ARE CONTINUED TO 09/30/2025 01:30 PM IN PERSON at Courtroom 9-D, Baltimore – Judge Rice.(related document(s) 531 Motion to Sell Free and Clear of Liens and Notice of Motion, 598 Objection, 601 Objection, 602 Objection, 603 Objection, 606 Objection, 611 Objection, 612 Objection, 653 Response, 679 Motion for Miscellaneous Relief, 728 Response, 730 Response, 738 Objection, 740 Opposition, 743 Line ) (Scott, Cherita)

So, publishers get a further day in court to make their case and Diamond’s motion is being pushed off to then too with their original consignment motion “stayed.” It’s a slight win for publishers but puts Diamond in a more difficult spot.

This is a BIG deal. There has been references that Diamond is running out of money with costs to operate still as well as costs of their advisors and lawyers they have for the Chapter 11 process. Diamond’s loan from JPMorgan matures on August 23 and it was raised in filings Diamond needed the consignment approval to help pay that back/know what’s next with that and JPMorgan’s filings on the subject basically saying “we get paid first.” Now, the consignment money isn’t guaranteed and they only have the sale of Diamond UK approved this week which brought in $2.1 million. It’s also another month to pay lawyers and financial management and a lot of work to be done, so potentially a lot of billable hours.

Transcripts hint the judge seems to be irritated at Diamond and JPMorgan, especially Diamond’s inability to keep their records straight. We’ve seen in released transcripts this issue raised multiple times and has been an issue for months. Diamond was threatened with turning their Chapter 11 into Chapter 7 due to it. They’re currently a month behind their required financial reports with June’s filed about a week ago.

In the August 5 hearing, The Court stated the following when talking about the want of discovery which would potentially delay the proceedings:

I’m concerned that the last hearing and recent hearings that this — the Debtor and these Estates are in potentially administrative insolvency jeopardy, and I’m not sure whether the Debtor and the Court have the luxury of waiting 90 days or 120 days for discovery.

Apparently the court wasn’t concerned enough because there’s now a month delay for decisions and potentially more discovery during that. Discovery is going forward, it would seem, and that’s a potentially costly process for those involved in both gathering documents as well as going through the documents.

Also, there are the actions of Ad Populum. Diamond has said they’ve been selling consigned goods without permission and without purchasing them. Image’s settlement with Diamond allows Diamond to now pursue Ad Populum for any money gained from the sale of Image’s goods. Will other publishers turn their sites on Ad Populum too? Ad Populum has been trying to get their CEO Joel Weinshanker to not testify in the case.

In discussions with certain Objectors, the issue of whether the Debtors are continuing to sell consigned inventory today has been raised. So, I want to be very clear for the record that the Debtors are not currently selling consigned inventory, and they have not sold any consigned inventory since the closing date of the sales of substantially all assets to the two purchasers, Universal and Sparkle Pop. The Debtors have become aware of the fact that Sparkle Pop, one of the purchasers of some of the Debtors’ assets, has been selling consigned inventory on or after May 16th. The Debtors promptly notified Sparkle Pop, both the principals at Sparkle Pop and Sparkle Pop’s counsel, to immediately stop any sales as to the consigned inventory because consigned inventory was explicitly excluded from the acquired assets under that APA.

The Debtors have sent several written communications to Sparkle Pop’s counsel and have verbally informed both the principals at Sparkle Pop and their counsel that they’re not to be selling the consigned inventory, that it’s in violation of the APA, and the Debtors have demanded that the proceeds of any such sales be remitted back to the Estates. Sparkle Pop has yet to respond to the Debtors’ various outreach. However, the Debtors are aware of the issue. We’re not hiding the ball there. The Debtors continue to raise this issue with Sparkle Pop and will continue to take the appropriate action to recover amounts realized by Sparkle Pop from the sale of any inventory on or after May 16th. So, this has been a topic in the informal discussions. The Debtors have provided information on this topic as it has been requested to the objection — to — as it has been requested by the objecting parties. So, we’re aware of it. We’re working to resolve it. We’re providing the information relating to that issue as it’s requested.

There’s now even more pressure on Diamond to settle with publishers to put this all behind them and move on to get this over. There’s already delays in Diamond submitting their final plan for chapter 11, and that won’t get settled until next year based on the current timeline. There’s also an “everyone loses” scenario and Diamond goes from chapter 11 to chapter 7 which makes it even more difficult for publishers to get paid what they’re owed (and it’s already going to be difficult based on the current financial situation of Diamond).

We’ll have more info on today’s proceedings when there is more released.

Sparkle Pop files a Motion to Quash a Subpoena for Joel Weinshanker

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Diamond Comic Distributors

Tomorrow, August 18, is a big day in the Diamond chapter 11 case with a hearing taking on multiple issues that need to be decided. It’s a hearing that’s expected to last multiple days.

Sparkle Pop has filed a motion to quash a subpoena for Joel Weinshanker as the corporate designee for Sparkle Pop. Weinshanker is the owner of the company’s parent company, Ad Populum and heavily involved in Sparkle Pop’s acquisition of Diamond’s assets during the chapter 11 process. The subpoena has the dates listed of the hearing from August 18 to 20 and was the subpoena was requested by the Ad Hoc Committee of Consignors which represents multiple comic publishers.

Sparkle Pop’s argument was there was not “reasonable time to comply” with the subpoena and it was delivered with one business day’s notice. They also argue the subpoena was to the corporate entity and not an individual which is against the rules. They also state that Sparkle Pop was served with a request for discovery by the Committee withdrew its request for a pre-hearing deposition and that this is an end-run around rule requirements. Weinshanker is also outside of the 100-mile limit dictated by rules regarding subpoenas as he resides in Florida and New York.

We’ve got some last minute drama here!

Diamond Throws Ad Populum Under the Bus and More in a Released Transcript

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Diamond Comic Distributors

As part of Diamond’s recent filing against the Ad Hoc Committee of Consignor’s motion to assume or reject contracts, a transcript from an August 5 hearing was released. The hearing covered a whole bunch of topics and there’s a lot of juicy details coming out of it.

Here’s the highlights of the 55 page document:

  • During a July 17 hearing, there was a mention of “significant discovery” by the Objectors but there hasn’t been up to this point. There was a lot of information requests that Diamond provided. There were requests for discovery after this date.
  • There’s been questions as to who is selling consigned inventory. Diamond hasn’t but the counsel throws Ad Populum under the bus claiming they were and have been told to stop.

In discussions with certain Objectors, the issue of whether the Debtors are continuing to sell consigned inventory today has been raised. So, I want to be very clear for the record that the Debtors are not currently selling consigned inventory, and they have not sold any consigned inventory since the closing date of the sales of substantially all assets to the two purchasers, Universal and Sparkle Pop. The Debtors have become aware of the fact that Sparkle Pop, one of the purchasers of some of the Debtors’ assets, has been selling consigned inventory on or after May 16th. The Debtors promptly notified Sparkle Pop, both the principals at Sparkle Pop and Sparkle Pop’s counsel, to immediately stop any sales as to the consigned inventory because consigned inventory was explicitly excluded from the acquired assets under that APA.

The Debtors have sent several written communications to Sparkle Pop’s counsel and have verbally informed both the principals at Sparkle Pop and their counsel that they’re not to be selling the consigned inventory, that it’s in violation of the APA, and the Debtors have demanded that the proceeds of any such sales be remitted back to the Estates. Sparkle Pop has yet to respond to the Debtors’ various outreach. However, the Debtors are aware of the issue. We’re not hiding the ball there. The Debtors continue to raise this issue with Sparkle Pop and will continue to take the appropriate action to recover amounts realized by Sparkle Pop from the sale of any inventory on or after May 16th. So, this has been a topic in the informal discussions. The Debtors have provided information on this topic as it has been requested to the objection — to — as it has been requested by the objecting parties. So, we’re aware of it. We’re working to resolve it. We’re providing the information relating to that issue as it’s requested.

Here’s our question, and why this doesn’t quite pass the smell test… if Sparkle Pop didn’t buy the “consigned inventory,”

  1. How do they know what inventory there was to sell?
  2. How did they deliver any of that inventory, assuming they have delivered it?
  • Diamond has worked on a resolution regarding the consignment inventory and though they’ve presented that to publishers, as of that hearing, non took on Diamond on their offer. There was a counteroffer. We’re told there’s been talking of publishers purchasing back their inventory.
  • Less than 20% of Diamond’s sale of inventory is the sale of inventory on consignment. There’s been accusations this is a fudging of numbers because Diamond includes items like Diamond Select which wouldn’t be consignment. But, when it’s just comic or game publishers, it’s over 20%.
  • There’s a lot of comments about the lack of Discovery, the process where individuals ask for evidence, believing it hadn’t been asked for because it wasn’t necessary or too expensive. Discovery requests came later that day from multiple groups and on August 8. There was also discovery asked for and Diamond only provided it through May 15 which is when the sale to Sparkle Pop and Universal closed and Diamond didn’t provide information for any sale prior or subsequent to that date but there has been property sold. The Court did have issue about further requests for discovery but Counsel for some of the debtors pushed back saying they had no idea who to ask for what since they had no idea who was selling the consigned goods. Sparkle Pop is again thrown under the bus.
  • The current loan from JPMorgan matures on August 23 and any further negotiations concerning that relies on what happens with the consignment motion from Diamond.
  • The consignment sale would result in the “significant amount of money” for Diamond. The wholesale value mentioned is $20 million for just some of the inventory. So, what Diamond has is far more than that, exceeding even our estimate based on responses from publishers. GAMA’s counsel says the inventory is “a couple hundred thousand dollars.”
  • The Court questions how JPMorgan didn’t know Diamond was selling goods on consignment from others? The lawyer for JPMorgan basically response with “Diamond has a lot of divisions and sells a lot of stuff” and Alliance and their game distribution needs to be factored in. The retort is that Diamond’s consignment motion is only for Diamond so their other divisions shouldn’t be factored in.
  • There’s questions as to why the process is being rushed as there’s no contract to purchase the inventory out there?
  • The Court was surprised Penn State University is part of this… they publish graphic novels/comics through the Graphic Mundi imprint.

From what I understand, it’s not a terribly profitable business, but it’s one that is educational.

  • Maybe Sparkle Pop isn’t selling consigned goods?

We received a representation in an e-mail yesterday in response to an inquiry received that’s saying that neither Debtor nor Sparkle Pop was selling any of these consigned goods, but many of my clients have received, I believe, solid evidence of the fact that that’s going on.

  • Diamond gets slapped a bit for not filing their monthly reports on time.

And with that… the hearing on August 18 was set with a lot on the docket to discuss.

Read the entire transcript below. It’s a doozy!

Alliance Attempts to Dismiss Sparkle Pop’s Amended Complaint

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Ad Populum vs. Alliance

Defendant Alliance Entertainment has filed a new motion with the court to dismiss the complaint, with prejudice, against it by Sparkle Pop. You can check out our dashboard with all of the major events including a timeline. Alliance had previously filed a similar motion in July, but that was denied. Sparkle Pop amended their complaint towards the end of July.

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.

In Alliance’s motion their attempt at dismissal revolves around:

  • Sparkle Pop lacks standing to enforce the terms of the contract that Alliance had signed to take part in the bid for Diamond’s assets
  • Sparkle Pop’s complaint isn’t specific enough and doesn’t go into enough details about who committed which wrong.
  • Sparkle Pop doesn’t establish it’s the owner of any trade secrets it claims Alliance stole.
  • Sparkle Pop fails to allege that Alliance acquired trade secrets by improper means.
  • Sparkle Pop doesn’t identify any valid trade secrets and the “trade secrets” they mention are out there in the public.
  • Sparkle Pop didn’t protect its trade secrets.
  • Sparkle Pop fails to state a claim under the MUTSA, a claim for Tortious Interference, or violation of the NDA

Short version, Sparkle Pop wasn’t specific enough…

You can read the full motion below:

Alliance’s Motion to Dismiss Sparkle Pop’s Lawsuit is Denied

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In early July, defendant Alliance Entertainment filed a motion with the court to dismiss the complaint, with prejudice, against it by Sparkle Pop. U.S. Bankruptcy Judge David E. Rice has denied that motion.

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 asking 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. That legal case was ongoing as of this initial launch.

Sparkle Pop has accused Alliance of breaking its NDAs, poaching Diamond employees, and stealing corporate secrets it learned during its bid for Diamond.

You can check out our dashboard with all of the major events including a timeline.

The Ad Hoc Committee Drops a Motion asking Out of Diamond, Ad Populum, and Universal Distribution, Who’s Actually Selling the Consignment Merchandise?

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Diamond Comic Distributors

There’s been a lot of unanswered questions when it comes to Diamond‘s chapter 11 filing and the purchase of its assets by Universal Distribution and Ad Populum/Sparkle Pop. The Ad Hoc Committee of Consignors has submitted a motion that lifts the veil a bit and gives clues as to some of those answers.

The Ad Hoc Committee of Consignors is a group of creditors, aka publishers, impacted by Diamond’s chapter 11 and also Diamond’s motion to try to sell consignment goods to help pay back its debts. The committee includes Ablaze, American Mythology, Avatar Press, Battle Quest, Drawn & Quarterly, Fantagraphics, Green Ronin, Hermes Press, Living the Line, Paizo, Udon Entertainment, and Zenescope.

At the heart of this motion is the question as to whether anyone can legally sell goods still held by Diamond and if Ad Populum or Universal Distribution properly continued any of the previous Diamond contracts.

In short, who the hell are currently selling and profiting from the comics and games being “sold by Diamond”?

Sit back, because this is a doozy of a filing and we’re going to try to break it down with bullet points for ease and the really interesting parts are in bold…

  • Diamond filed its bankruptcy on January 14, 2025 and on January 21 put in a motion to sell its assets
  • On May 1, Ad Populum/Sparkle Pop and Universal Distribution won the bidding prosses for the assets
  • On June 10, Diamond filed a notice of the sales closing with each closed in mid-May
  • Goods held on consignment by Diamond were excluded from the inventory sold to Ad Populum/Sparkle Pop and Universal Distribution
  • Spark Pop was given 20 business days after closing to decide what contracts it would continue and that includes the contracts (consignors) between Diamond and the publishers
  • Diamond nor Ad Populum/Sparkle Pop filed motions to have the “Consignors’ Contracts assumed and assigned.” This ended in early June 2025
  • Universal Distribution did include assumed contracts in its sale closing which was filed a month after closing. That included Green Ronin Publishing and a distribution agreement with Paizo. But, the purchase agreement and sale order didn’t identify any assigned contracts, so there’s some paperwork issues there.
  • On June 25, 2025, Diamond filed a motion to sell the consigned inventory it has.
  • After, there were a lot of objections to that consignment sale.
  • On April 17, Titan Publishing Group filed an emergency motion to compel Diamond to assume or reject its distribution agreement with Titan
  • On May 16, 2025, Diamond filed a motion objecting to Titan’s motion.

Got all that? In short, no one has filed the paperwork properly to assume or reject the contracts that existed between Diamond and the publishers.

There’s more interesting details…

On May 27, an email was sent to publishers stating the Ad Populum/Sparkle Pop and Universal Distribution were responsible for all sales activity after May 16 and Ad Populum/Sparkle Pop’s Diamond was a new entity. The Ad Hoc’s motion states that the email sent misled the publishers that the “Asset Sale to Sparke Pop was actually a sale of ownership, because it indicated that Diamond continued to operate under the ownership of a new buyer.”

What’s interesting is that that email says Ad Populum is responsible for new stock, but never took over any stock and that the legacy consignment stock continued to be sold… by someone.

And that’s what is at the heart of this motion, who is selling the stock that Ad Populum/Sparkle Pop and Universal didn’t purchase. Diamond isn’t providing information concerning that.

The May E-Mail confirms that the Stock continued to be sold by someone after the Sparkle Pop and/or UDL sales closed, but it is unclear who is selling the Stock. The Debtor has confirmed that it has not sold stock after May 15, 2025, but has declined to voluntarily provide any information to the Consignors as to who sold Stock after May 15, 2025, which Stock was sold, or what payments remain due and owing to the Consignors on account of
the sales. The Debtors have declined to voluntarily provide any information to the Consignors as to how any party other than the Diamond Distributor Debtor could sell Stock without a properly assumed and assigned agreement to do so.

The motion has amounts that are owned to each of the publishers. The 12 publishers are owed at least $555,971.84. But, that amount is unknown and likely higher since Diamond isn’t providing up-to-date reporting as to what’s sold or collected, so that amount may be higher.

The motion goes on further to poke holes in Diamond’s plan to sell the consignment stock and that there are outstanding obligations.

It’s asking for the status of these contracts to be determined and done so soon and the consignors what the contracts to be terminated when if Diamond rejects the contracts.

They’re also conducting discovery to find out who sold the stock after the May 15 sale to Ad Populum/Sparkle Pop.

Buckle up, this is going to get very interesting!

Read all of the filings below:

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