There’s many motions still out there regarding Diamond‘s chapter 11 process. One is that Diamond still hasn’t properly made decisions when it comes to its various leases. As part of the process, the former and new comic distributor must decide what it wants to do, either assume the lease(s) or reject them. (Old) Diamond could reject the lease while (new) Diamond could assume the lease.

The decision to do so has been extended before and it’s extended again, now approved by the court.

These decisions have become something to fight over more and more. Diamond recently came to a deal regarding its Olive Branch warehouse in Mississippi. But, that motion was objected to due to the fear of insolvency of Diamond.

The deadline to assume or reject the leases is now extended through October 31, 2025.

The Texas Comptroller and State of Texas have withdrawn their claim against Diamond Comic Distributors. The claim was filed May 9, 2025 and was incurred from November 2024 to January 2025 and a tax for sales and use. The amount was $12,809.72.

In September, Diamond submitted its second motion to push its due date for its chapter 11 plan to October 29 with 90 days after to solicit votes, which would be December 29, 2025. It was decided to be due October 15 with the solicit period ending on December 15. Now, Diamond has submitted a third motion that guarantees this will go into 2026 as we expected.

The third motion would have the chapter 11 deadline pushed to January 13, 2026 and then a 91 day window to solicit votes which would put it at March 16, 2026.

With one day to go, it’s likely it’ll get pushed out yet again. The reasons provided are the same listed before:

It’s a complex case involving four jointly-administered Debtors with over 1,000 creditors and $80 million in debt;

• Diamond has made “good faith progress”;
• There’s still the consignment sale issue to deal with;
• Diamond is paying bills as they come in;
• There’s a plan coming and they need more time to monetize their assets;
• It’s only been nine months…;
• Diamond doesn’t believe this will “pressure creditors.”

What isn’t mentioned is the growing concern that (old) Diamond is actually insolvent, a concern being raised by its creditors and we’d expect to see some response raising that fear.

The legal representation for publishers have been standing up in recent months in regards to Diamond’s Chapter 11 process. Yesterday, the Ad Hoc Committee filed an objection concerning Diamond’s motion for entry of an order to approve it agreement regarding its Memphis warehouse. Now, the Consignment Group has followed up with a limited objection of their own.

The Consignment Group represents multiple publishers: Aspen, Black Mask Studios, Dark Horse Comics, DSTLRY Dynamic Forces aka Dynamite Entertainment, Heavy Metal International, Magnetic Press, Massive Publishing, Oni-Lion Forge Publishing Group, Panini UK, Punk Bot Comic Books, LLC aka Alien Books, The Penn State University aka Graphic Mundi, Titan Publishing Group, and Vault Storyworks aka Vault Comics.

Their limited objection echoes the Ad Hoc Committee’s citing concerns over Diamond’s solvency.

The motion shows shrinking equity in Diamond’s monthly operating reports, something we’ve been regularly reporting on.

Again, like the Ad Hoc Committee, the Consignment Group feels that the payment shouldn’t be made until protections have been put in place to “ensure a ratable distribution among all similarly situated administrative claimants in the event of administrative insolvency.”

The legal representation for publishers have been standing up in recent months in regards to Diamond’s Chapter 11 process. They’ve filed multiple objections to motions with the latest by the Ad Hoc Committee concerning Diamond’s motion for entry of an order to approve it agreement regarding its Memphis warehouse.

In October, Diamond filed an order to pay money owed to the company that owns the warehouse property, AIRETT, with over $450,000 of it going towards taxes Diamond didn’t pay but AIRETT did. Over $500,000 would be paid out in total.

In their filing, the Ad Hoc Committee states that Diamond reached out to them before filing the motion. They informed Diamond then that they felt that “such a settlement of the dispute between the Debtor and the Landlord must be approved after motion, notice to all parties in interest, and the other protections afforded to parties in interest under Bankruptcy Rule 9019.”

In short, there’s a lot of parties that are owed money and it needs to be sorted out before Diamond drops half a million dollars over its lease.

The filing dives deep into Diamond’s monthly operating reports raising concerns that Diamond owes a lot and doesn’t have a lot of assets.

At this time, the last monthly operating report that Diamond Comic Distributors, Inc. (“Distributor Debtor”) filed indicates that there are total postpetition payables of $9,596,504, of which over $4.7 mm are past due, with total postpetition payables recorded as $10,047,876, along with $604,284 of priority debt. The total assets are reported as being $10,837,210, but the vast majority of assets reflected on the MOR are comprised of receivables of $9,333,980, with no aging report or other indication of how collectible the receivables are.

Accordingly, it is questionable (if not most likely) that the Distributor Debtor is administratively insolvent. The Committee members, along with dozens of other similarly situated consignors, are owed money for postpetition sales by the Debtor and also by the Debtor’s purchaser, some or all of which claims are entitled to administrative priority.

They think that any money due to the landlord should be paid out when decisions are made about what the publishers and others receive and not before.

For much of Diamond‘s chapter 11 process, lawyers, counsel, and more have submitted filings for payment for their work with little fanfare. The filings and payments are in the millions at this point over the 9 months of the process. Now, things are shifting as objections are being filed over the motions with one coming today.

The Consignment Group has submitted a limited objection over the final order for the third monthly fee application of Stephenson Harwood LLP, Special Counsel to Diamond.

In the motion, the Consignment Group makes it clear they don’t object to the compensation but the fact the payment would be immediate.

The Consignment group states “there exists a substantial risk of administrative insolvency in the Debtors’ cases.” In short, Diamond might run out of money and can’t pay anyone it owes.

Instead, the Consignment group feels the final award shouldn’t be paid immediately without protections in place “to ensure a ratable distribution among all similarly situated administrative claimants in the event of administrative insolvency.”

In short, they want to make sure that all of Diamond’s money doesn’t go to lawyers and consultants and the creditors, aka publishers, should be getting some of what they’re owed too. There has been a growing concern, even expressed by Diamond itself, that they won’t be able to make it through this process without running out of money.

One of the outstanding issues with Diamond‘s chapter 11 bankruptcy is the status of its Memphis warehouse. An order approving a deal regarding it was submitted by Diamond but that that hit a bump. The court directed Diamond to file a Rule 9019 motion due to objections by the Ad Hoc Committee of Consignors and the Consignment Group. Today, a motion was submitted. Also, Diamond has pushed to have a decision expedited with it happening by October 8, 2025.

The 600,000 square foot commercial warehouse is located in Olive Brandh, Mississippi and was the main warehouse for Diamond. It was believed that gaining it was one of the main reasons Ad Populum/Sparkle Pop purchased Diamond on the bankruptcy but as we’ve learned, Diamond is just leasing it and the transfer to new Diamond has been delayed.

As part of the agreement:

1. (New) Diamond would take over the lease of the warehouse;
2. $451,083.73 will be paid from proceeds escrowed from the closing on the sale to Sparkle Pop that’s in escrow;
3. $84,510.81 will be paid by Diamond.

The $451,083.73 is due to property taxes paid by AIRETT, the landlord, that Diamond failed to pay.

Now… to see if there are more objections… Check out all of the documents below!