Tag Archives: bankruptcy

The Ad Hoc Committee of Consignors Object to Diamond’s Motion to Approve the Sale of Consigned Inventory

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Publishers have been filing objections to Diamond Comic Distributor‘s motion that would allow them to sell, liquidate, dispose of, inventory it currently still has. Many publishers have already been vocal about the motion and many have responded to our inquiries with “no comment” because it’s an ongoing legal matter. So far, TwoMorrows Publishing, Magma Comix, and Graphitti Designs, Abstract Studio, NBM, William M. Gaines, Agent, Inc., Humanoids, a joint filing by 13 publishers, and GAMA have each filed objections to the motion.

Now, the Ad Hoc Committee of Consignors has filed their own objection to the motion. The Ad Hoc Committee of Consignors is a group of creditors that has formed to represent the interests of those who provided goods to the debtor. In other words, this group represents publishers and others who Diamond owes money.

The Ad Hoc Committee takes a bit of a different approach. They state Diamond’s claim on the stock is false. That in Diamond’s initial motion they “wrongly frame the context.” Diamond claims the consigners have a “competing interesting in the stock.” The Ad Hoc committee says there’s no competing interest, they OWN the stock and Maryland law says the stock is the consignors’, aka publishers. And because it’s not Diamond’s stock, they shouldn’t be able to sell it.

Some of the argument is what we’ve seen in other objections, but this goes into a bit more detail about this particular aspect.

Some of that detail includes specifics in the agreement like intellectual rights, Diamond’s failure of payments negated the contracts but the biggest…

NOWHERE DOES DIAMOND SAY WHAT STOCK IT INTENDS TO SELL!

This is a question we’ve had and when talking to publishers, it was clear they had the exact same question.

Interesting, the Ad Hoc Committee points out that consigned goods are not part of the borrowing base in Diamond’s credit agreement. It’s all technical but an argument we haven’t seen others made.

Like other objections, it dives into what consignment actually is and that the merchandise Diamond has doesn’t require the UCC-1 form to be filled out to protect it and is part of Diamond’s original motion.

But, the Ad Hoc Committee doesn’t stop there as they state “there are other defects in the motion.”

  1. Diamond doesn’t identify the bidding process or what stock is being sold;
  2. The sale would impact royalty payments and create losses for the consignors in addition to what they’d lose in the stock;
  3. It’d depress the market for that stock since Diamond would have sold it so cheap;
  4. Consignors may seek termination of the agreements so the stock should be returned if they do;
  5. Basically, Diamond wants to sell other people’s property which will harm the owners which is not allowed in chapter 11 which is to be “governed by principles of equity and fairness.”

Read the full filing below, it’s massive:

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The Game Manufacturers Association Objects to Diamond’s Consignment Liquidation Plan

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Publishers have been filing objections to Diamond Comic Distributor‘s motion that would allow them to sell, liquidate, dispose of, inventory it currently still has. Many publishers have already been vocal about the motion and many have responded to our inquiries with “no comment” because it’s an ongoing legal matter. So far, TwoMorrows Publishing, Magma Comix, and Graphitti Designs, Abstract Studio, NBM, William M. Gaines, Agent, Inc., Humanoids, and most recently a joint filing by 13 publishers have each filed objections to the motion.

Now, the Game Manufacturers Association (GAMA) on behalf of Skyscraper Studios, Roll for Combat, and Liminal Esports, aka Snowbright Studio, have submitted its own objection to the motion.

GAMA takes the stand that the consigned goods are not the property of Diamond, a pretty consistent statement in objections. They’ve taken the pretty recent argument made by Humanoids, and the 13 publishers, that the publishers are not subject to Article 9 and thus did not need to file UCC-1 to protect their goods, part of Diamond’s claim. They also repeat that there are obligations in the agreements between Diamond and the publishers and if they’re not met, then it’s a “material breach.”

Much like the most recent filings, who “owns” the goods hasn’t been determine and that needs to be determined GAMA argues and an “adversary proceeding” being required.

New is that Diamond needs to fulfill their obligations under the agreements between them and the publishers and that by failing to do so would be a “material breach.” If Diamond sells the goods in this liquidation plan it’d be a violation of the agreements and any contracts that are rejected need to be approved by the Court in the bankruptcy.

GAMA goes into more detail on “administrative expense priority claims” that would be owed to the creditors, aka publishers. Since the merchandise was acquired after they declared Chapter 11, the consignors are entitled to “administrative expenses” since they helped Diamond stay afloat and conduct business after they filed.

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Publishers Respond to Diamond’s Motion to Move its Consignment Hearing to the middle of SDCC

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A group of 13 publishers have filed a response to Diamond‘s attempt to move the hearing regarding its consignment plan. While it was originally scheduled for July 21, Diamond wanted to move it to July 24 or 25. Image Comics weirdly supported the move, even though in their support Image brings up San Diego Comic-Con during that week. The new proposed dates would be smack dab in the middle of SDCC.

On June 25, 2025, Diamond Comic Distributors submitted a motion that would allow them to sell, liquidate, dispose of, inventory it currently still has. The 13 publishers have also filed an objection to Diamond’s motion.

The group of publishers have filed a response that they don’t disagree with the move but ask for it to happen some time after San Diego Comic-Con, so after July 27.

They also are asking for that hearing to be an initial, non-evidentiary hearing, instead of deciding if Diamond’s original motion is approved.

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13 Publishers Submit a Joint Motion Objecting Diamond’s Consignment Motion

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It’s a massive team-up of publishers who have filed a joint motion objecting to Diamond Comic Distributor‘s motion that would allow them to sell, liquidate, dispose of, inventory it currently still has. Many publishers have been vocal about the motion and many have responded to our inquiries with “no comment” because it’s an ongoing legal matter. So far, TwoMorrows Publishing, Magma Comix, and Graphitti Designs, Abstract Studio, NBM, William M. Gaines, Agent, Inc., and Humanoids have each filed objections to the motion.

Aspen Comics, Black Mask Studios, DSTLRY Media, Dynamic Forces, aka Dynamite Entertainment, Heavy Metal International, Magnetic Press, Massive Publishing, Oni-Lion Forge Publishing Group aka Oni Press, Panini UK Ltd., Punk Bot Comic Books, aka Alien Books, The Penn State University aka Graphic Mundi, Titan Publishing Group, and Vault Storyworks, aka Vault Comics formerly known as Creative Mind Energy have formed like Voltron to form a new team called the “consignment group” entering the legal fight.

The 63 page document starts with what we’d expect stating the publishers own the merchandise, aka consigned goods, and not the property of Diamond Comic Distributors. It then dives into Diamond’s claim that the publishers needed to file a UCC-1 financing statement which would have protected them against this situation. The legal argument says that may not needed as this was a “true consignment” established by the various contracts signed and state law.

This filing is similar to Humanoids’ stating that contested matter needs to be handled by Rule 7001(2) of the Federal Rules of Bankruptcy Procedure and requires an adversary proceeding and emphasizes again that the publishers own the goods, not Diamond. It also states that it was Diamond’s intention to sell the goods this way and that they should have paid the publishers as per the terms of their agreements.

Like Humanoids’ objection, there’s a focus on Bankruptcy Rule 7001(2) requires that says an adversary proceeding has to happen to determine the “validity, priority, or extent of [an] interest in property.” In short, it hasn’t been determined that the consignment product is property of Diamond and that needs to happen before they can sell anything.

Part of Diamond’s initial motion is that no publishers filed a UCC-1 financing statement which would have protected them. But, did they even need to file it? The publisher’s motion calls them “true consignments,” and don’t meet the definition of UCC Section 9.

(A) the merchant:
(i) deals in goods of that kind under a name other than the name of the
person making the delivery;
(ii) is not an auctioneer; and
(iii) is not generally known by its creditors to be substantially engaged
in selling the goods of others.
(B) with respect to each delivery, the aggregate value of the goods is $1,000 or
more at the time of delivery;
(C) the goods are not consumer goods immediately before delivery; and
(D) the transaction does not create a security interest that secures an obligation.

Back to that non-payment. Goods were shipped after Diamond’s January 14 Chapter 11 filing, and the publishers should be paid for them and administrative expense claims such as attorney fees and late penalties.

The rest of the filing includes purchase order agreements, distribution agreements, details of those agreements like discount percentages, and more.

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Humanoids Objects to Diamond’s Consignment Motion. Objection Deadline Extended. GAMA enters the Chat. William M. Gaines, Agent, Inc’s Objection Has Some Issues.

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Today has been a busy day when it comes to Diamond Comic Distributor‘s Chapter 11 process. All of it revolves around Diamond’s motion regarding consignment merchandise they still have. On June 25, 2025, Diamond Comic Distributors submitted the motion that would allow them to sell, liquidate, dispose of, inventory it currently still has. Many publishers have been vocal about the motion and many have responded to our inquiries with “no comment” because it’s an ongoing legal matter. So far, TwoMorrows Publishing, Magma Comix, and Graphitti Designs, Abstract Studio, NBM, and William M. Gaines, Agent, Inc. have each filed objections to the motion.

The deadline for the objections to be filed was supposed to be today, July 16, but Diamond and Image Comics have submitted a stipulation to extend the deadline to July 18, 2025 at 12:00 p.m. (ET).

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Humanoids submitted their own objection to the motion. First, Humanoids says that the merchandise isn’t consignment at all and doesn’t meet the criteria to be. If it’s not consignment, then Diamond doesn’t have the right to do what they want. And, there needs to be an entire process regarding this to determine what the merchandise is and who “owns” it. Humanoids claims Diamond’s motion is the wrong process.

The filing is the most impressive so far. It goes beyond the distribution agreement or just stating it’d be a negative impact for business, Humanoids’ filing goes into other similar cases and rulings, making a very sound legal argument.

It’s a solid read overall.

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William M. Gaines, Agent, Inc.‘s objection filed earlier today has some issues that need to be fixed according to the Clerk of Court.

The attorney that filed the motion is not by an individual or by a member of the court undertaking this. So, the lawyer needs “Admission Pro Hac Vice,” basically to be approved by the court to practice in this court/state.

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Finally, the Game Manufacturers Association (GAMA) has entered the court proceedings. Some game publishers have been impacted and were named in Diamond’s motion to sell the merchandise. They’ve asked for James R. Irving to admitted to the court. He’s a member in good standing in multiple other courts. GAMA is a potentially a pretty big heavy hitter getting involved in the legal mess.

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Two More Objections Filed Regarding Diamond’s Motion to Sell/Liquidate/Dispose Consignment Stock

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The objections to Diamond Comic Distributor‘s motion for the “sale or other disposition of consigned inventory” are rolling in with two more comic publishers filing today and more, we’re told, on the way. On June 25, 2025, Diamond Comic Distributors submitted the motion that would allow them to sell, liquidate, dispose of, inventory it currently still has. Many publishers have been vocal about the motion and many have responded to our inquiries with “no comment” because it’s an ongoing legal matter. So far, TwoMorrows Publishing, Magma Comix, and Graphitti Designs, and Abstract Studio have each filed their own objections. Today, NBM and William M. Gaines, Agent, Inc. have each filed objections to the motion.

NBM’s objection has followed previous ones highlighting the stock was in Diamond’s possession as consignment as per an agreement and Diamond does not own the merchandise.

The financial interest and hardship towards NBM is also mentioned as the merchandise would likely be sold at a great discount hurting their ability to sell the product at “normal” prices but also impact Lunar Distribution, their new distributor, from selling product to stores as well.

You can read NBM’s filing:

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An attorney for William M. Gaines, Agent, Inc. also submitted an objection to Diamond’s motion. They too highlight a “settlement agreement,” this one from March 2011. This agreement was between Gemstone Publishing, Diamond, and Gaines Agent. This sounds different than the normal distribution agreement that others have used as their argument against Diamond’s plan.

A “settlement agreement” is a legally binding contract that resolves a dispute and prevents future litigation. We found an article by Diamond about EC Comics’ return from Gemstone around 2006. Gaines Agent says that Diamond may not dispose of or sell any of the inventory covered by the 2011 agreement. The actual “settlement agreement” was not included in this filing but is offered to be filed if the court requests it.

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Image submits a joinder to Diamond’s motion to adjourn its hearing about its Consignment Motion

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Image Comics logo

Earlier today, Diamond Comic Distributors filed a motion to adjourn the hearing regarding its motion to approve procedures to sell or otherwise dispose of consignment inventory. The hearing was originally going to take place on July 21 with July 16, 2025 being the deadline for objections to be filed. July 21 is the Monday before San Diego Comic-Con and at least one publisher has asked for the hearing to be delayed until after the convention. Diamond has asked for the hearing to be moved to July 24 or 25, the Thursday or Friday of San Diego Comic-Con, an even worse date for publishers impacted by this motion (there’s 128 of them listed in the initial filing). The objection deadline date would remain July 16. In an interesting turn of events, Image Comics filed a joinder in support of the adjournment motion.

Based on Image’s motion, they’re the publisher Diamond mentioned whose counsel would not be able to make the original hearing date.

In addition, Image’s bankruptcy counsel will be returning to Cleveland, Ohio the night of July 20, 2025 from an international trip that was scheduled months in advance, making it virtually impossible to be in Baltimore the next morning. And, Image’s local counsel, who must be present pursuant to Local Rules, will be out of the country on July 21, 2025.

Image does bring up that many parties will be present at San Diego Comic-Con, a concern we raised in our original article, and thus be unable to participate. But, Diamond had suggested to adjourn the hearing until July 24 or July 25, which are both during Comic-Con… so that is rather befuddling.

You can read Image’s joinder below:

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Diamond motions to “Adjourn the Hearing” on its previous motion to Sell/Dispose of Consigned Inventory

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Diamond Comic Distributors

Diamond Comic Distributors have filed a motion to adjourn the hearing regarding its motion to approve procedures to sell or otherwise dispose of consignment inventory. The hearing was originally going to take place on July 21 with July 16, 2025 being the deadline for objections to be filed. July 21 is the Monday before San Diego Comic-Con and at least one publisher has asked for the hearing to be delayed until after the convention. Diamond has asked for the hearing to be moved to July 24 or 25, the Thursday or Friday of San Diego Comic-Con, an even worse date for publishers impacted by this motion (there’s 128 of them listed in the initial filing). The objection deadline date would remain July 16.

Multiple objections to this have been filed so far including TwoMorrows Publishing, Magma Comix, Graphitti Designs, and Abstract Studio. More are being worked on.

The move by Diamond to sell the consignment product is to allow Diamond to “expeditiously market, sell or otherwise dispose of their consigned inventory, thereby minimizing costs and maximizing sale proceeds to the benefit of the Debtors’ estates and their creditors.” The “creditors” is most likely JPMorgan Chase Bank who Diamond has a debtor-possession credit agreement which is due August 23.

In Diamond’s filing they state:

  1. …the Debtors have already received several responses to the Consignment Motion from various consignors and anticipate additional responses before the Objection Deadline;
  2. The Debtors have begun discussions with certain consignors to address the responses and related questions received to date regarding the consigned inventory. Adjourning the hearing on the Consignment Motion will permit the Debtors to further engage with consignors to narrow, or otherwise streamline, the potential issues to be presented to the Court at the hearing on the Consignment Motion;
  3. The Debtors thus believe that the additional time will allow the hearing to proceed more efficiently.
  4. …the Debtors received a request from one of the Debtors’ more significant consignors to continue the hearing on the Consignment Motion to accommodate a scheduling issue for counsel.

In short, Diamond is getting a lot of shit from publishers unhappy with the decision and they believe they can work out a plan ahead of the motion’s hearing and/or smooth over the objections. One major player is big enough that a scheduling issue for their counsel would get Diamond to want to change the date to accommodate them.

Diamond would like the motion to be decided sooner than later so they can begin the process of liquidation (if approved) ahead of the maturity date of its credit on August 23.

The hearing for the request will be held on July 17 at 2pm ET.

Read the court documents below:

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Abstract Studio Object to Diamond’s Proposed Consignment Sale

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Abstract Studio

The objections to Diamond Comic Distributor‘s motion for the “sale or other disposition of consigned inventory” are rolling in with another comic publisher filing one today and more, we’re told, on the way. On June 25, 2025, Diamond Comic Distributors submitted the motion that would allow them to sell, liquidate, dispose of, inventory it currently still has. Many publishers have been vocal about the motion and many have responded to our inquiries with “no comment” because it’s an ongoing legal matter. So far, TwoMorrows Publishing, Magma Comix, and Graphitti Designs have each filed their own objections. Today, Abstract Studio has joined that list of objections. Abstract the publishing company of Terry Moore and Robyn Moore, the team behind Strangers in Paradise, Serial, Parker Girls, Rachel Rising, and Motor Girl.

In their objection, the publisher notes its distribution agreement began in November 2022 and that Abstract has a financial interest in recovering its product in a “timely manner.” They state the items are property of Abstract Studio until its distributed and that it is not owned by Diamond, and the creditors that have made loans to Diamond should have known this when Diamond used that inventory as collateral towards it loans. Abstract is asking for Diamond’s motion to be denied.

Those who want to object to the motion have until July 16, 2025 to do so in writing and file it with the Clerk of the Bankruptcy Court (Objections to the Motion must be in writing and filed with the Clerk of the Bankruptcy Court, 101 West Lombard Street, Suite 8530, Baltimore, Maryland 21201, on or before July 16, 2025; and be served so as to be received on or before the Objection Deadline by the undersigned counsel for the Debtors.). The hearing on the motion is being held on July 21.

You can read the full objection below:

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Green Ronin Publishing launches a GoFundMe to Take on Diamond

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On June 25, 2025, Diamond Comic Distributors submitted a motion for the “sale or other disposition of consigned inventory.” After Diamond’s sale of the majority of its assets to Universal Distribution and Ad Populum/Sparkle Pop, (old) Diamond still has a “significant inventory” that was sent on a consignment basis.

(Old) Diamond is claiming the consignors (the sellers) haven’t followed the legal steps to establish a superior claim to their inventory. In short, the publishers (owners of the product) haven’t done what’s require by law to protect their ownership rights. So now, (old) Diamond has to do something with all of that inventory.

So, (old) Diamond submitted a motion to approve their plan to market, sell, or dispose of the inventory to “minimize costs and maximize recoveries” and generate the “best result for the estates.” It is assumed that money raised from the sale would go towards paying off money owed to JPMorgan Chase Bank which has provided loans to the company throughout the Chapter 11 process. So, instead of money going towards publishers, it’d likely go towards a bank. Yes, product publishers paid to print would go to help Diamond and publisher’s would possibly receive nothing.

Those who want to object to the motion have until July 16, 2025 to do so in writing and file it with the Clerk of the Bankruptcy Court (Objections to the Motion must be in writing and filed with the Clerk of the Bankruptcy Court, 101 West Lombard Street, Suite 8530, Baltimore, Maryland 21201, on or before July 16, 2025; and be served so as to be received on or before the Objection Deadline by the undersigned counsel for the Debtors.). The hearing on the motion is being held on July 21.

So far, TwoMorrows Publishing, Magma Comix, and Graphitti Designs have submitted objections to the plan. But, legal fights require money.

Green Ronin Publishing has launched a GoFundMe to help with their legal fight. From their fundraising page:

This is a dire financial threat to our company, not just today, but well into the future. We must secure legal representation immediately before the deadline to do so passes.

While there is no “good” time for someone to steal hundreds of thousands of dollars worth of your property to sell for the benefit of their biggest creditors, it is especially challenging given that Gen Con is weeks away. Gen Con is not just a convention for us, it’s our most important annual event for connecting with TTRPG enthusiasts, our business partners, and our community, and this year is no exception. We’re launching new products and have already committed significant funds to cover everything from booth space, travel (flights, rooms), and most critically, the production of new books and merchandise specifically for the show floor.

Diamond’s bankruptcy and this legal action also mean that Green Ronin has lost its book trade distributor. We are looking for a new partner, but that will take some time. Book trade sales of literary licenses, currently The Fifth Season and The Expanse, are a key part of our strategies for those games. This is especially bad timing for The Fifth Season RPG because we recently received final approvals from N.K. Jemisin and the game is ready to go to print.

We simply don’t have the cash on hand to do all of this, pay for an attorney, or participate in any collective legal actions with other publishers in our same position.

The banks are stopping at nothing to wring every last dollar out of Diamond – including taking several hundreds of thousands of dollars worth of Green Ronin product to sell in order to pay Diamond’s debts – but they can’t do that, and we’ve got a legal agreement that says as much. Now, we just need to secure a law firm to represent us in the courts.

The funds raised through this campaign will be used directly to cover the escalating legal fees associated with fighting Diamond’s claim in bankruptcy court. This includes attorney retainers, court filing fees, and the costs of pursuing every possible avenue to recover our inventory and protect Green Ronin’s assets.

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