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

Posted on August 2, 2025 by Brett

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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Diamond Chapter 11

Zombie Love Studios Objects to Diamond’s Motion to Sell Consignment Merchandise. Immediately Gets a Deficiency Notice.

Posted on August 1, 2025 by Brett

The issue as to whether Diamond can sell the consignment merchandise it still has to raise funds to pay back creditors is yet to be decided. The hearing, which was to take place during San Diego Comic-Con, has been pushed back and objections are still coming in.

The latest objection is from Chris Robinson and Zombie Love Studios.

The objection states what has been said before, the inventory was sent to Diamond to be sold on consignment, there is an agreement, and the merchandise is the publisher’s property, not Diamond’s. Until payment is made, the inventory is still the publisher’s property and Robinson states he objects to Diamond selling the items without paying them.

Robinson further states that Diamond’s plan would jeopardize the publisher financially and that the plan would flood the market with liquidated prices that’ll hurt their longterm ability to sell the same products for “normal” prices as well as undercut their current distributor, Lunar Distribution.

The motion was followed up by a deficiency notice since Robinson and Zombie Love Studios is not represented by an attorney who is a member of the bar of the District Court. They have until August 15 to correct the issue.

You can read the motion as well as the deficiency notification below:

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Diamond Chapter 11

Comic Exports, Inc. and Comic Holdings, Inc. Intent to Sell Diamond Comic Distributors UK Gets an Official Announcement

Posted on July 31, 2025 by Brett

Last week, we were first to break the news that Comic Exports, Inc. and Comic Holdings, Inc. had filed a motion with the court to sell their shares of Diamond UK to a new company. The new company, Diamond Distributors UK Ltd., is a new company owned and managed by the existing United Kingdom-based management team of Diamond UK.

The sale is part of Diamond’s chapter 11 bankruptcy proceedings. In January 2025, Diamond Comic Distributors filed for Chapter 11 bankruptcy. Since then, it has been selling its assets to raise funds to repay its creditors. Diamond UK was one of the last major assets that was up in the air as to its fate. You can get all of the news concerning that here.

You can read the full official press release below.

Comic Exporters, Inc. and Comic Holdings, Inc., subsidiaries of Diamond Comic Distributors Inc., today announced that they have entered into an agreement to sell 100% of the shares of Diamond Comic Distributors UK (“Diamond UK”) to Diamond Distributors UK Ltd., a new company owned and managed by the existing United Kingdom-based management team of Diamond UK. Comic Exporters, Inc. and Comic Holdings, Inc. are part of the chapter 11 bankruptcy proceedings of Diamond Comic Distributors, Inc., and therefore, the parties’ agreement is subject to United States Bankruptcy Court approval.

“We are extremely pleased that we have entered into this agreement and look forward to Court approval of the sale of the shares in Diamond UK,” said Diamond Chief Restructuring Officer Robert Gorin. “We are confident that Diamond UK’s publishers, retailers and other business partners will be in good hands with Diamond Distributors UK Ltd.”

“The management team of Diamond UK is extremely proud of the hard work that the entire UK team has put in during the Chapter 11 process and thankful for the support shown to us by all the publishers/partners and our accounts-retailers, whom we represent and supply in the United Kingdom, EMEA region and Australia,” said Mike Holman, Chief Executive Officer of Diamond UK. “We can think of no better way to thank them than by working toward a reliable and profitable future together.”

About Diamond UK

Diamond UK is a standalone business that serves the United Kingdom, European, Middle Eastern, and Australian comic book, collectible, and book markets, and is the dominant distributor for major publishers.

Diamond Chapter 11

The Official Committee of Unsecured Creditors has filed a Statement and “Reservation of Rights” concerning Diamond’s Consignment Motion

Posted on July 26, 2025 by Brett

The Official Committee of Unsecured Creditors has filed a statement and “reservation of rights” concerning Diamond‘s motion to sell the remaining consignment stock it has.

In the filing, the committee notes there has been a lot of responses to this particular motion, 12 objections so far and more have contacted the committee.

The committee believes that the motion will cause another round of litigation, increasing costs, and dragging things out. It mentions the two other lawsuits related to Diamond’s Chapter 11 filing and reveals it believes there are $30 million claims by Diamond and Ad Populum against Alliance Entertainment.

The committee thinks facts need to be laid out, and quickly regarding the consignment question with a conference on the motion set for August 5.

Interestingly, there’s mention of “settlement discussions” that will:

the projected value of the consigned inventory to be sold in the Consignment Sales and an accounting of same;
the projected value of the consigned inventory to be sold in the Consignment Sales, and the claims asserted by consignors, specifically attributable to goods delivered after the Petition Date;
whether consignors received consigned inventory, delivered prior to the Petition Date, back from the Debtors after the Petition Date;
whether consignors were paid after the Petition Date for consigned goods that were delivered to the Debtors prior to the Petition Date;
the amounts of each consignor’s claims against the Debtors’ estates arising prior to or after the Petition Date, and whether those amounts match what is in the Debtors’ books and records; and
the costs and expenses incurred by the Debtors in connection with storing consigned inventory since the Petition Date, as well as storage charges paid and owing by consignors since the Petition Date.

The Committee believes these data points and others could be significant and should be factored into any settlement proposal.

It interestingly acknowledges if Diamond can sell the stock, it’d get a potential significant amount of money. But, it may also open them up to “administrative expense claims,” and more legal fights and maneuvering all of which will cost more money.

In short, they think lawyers are about to make a lot more money from Diamond, the debtors, and this potentially is getting dragged out, so they want the court to consider all of that when making a decision.

Read the full motion below:

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Diamond Chapter 11

The Ad Hoc Committee Files a Motion to Stay Diamond’s Motion To Sell its Consignment Inventory

Posted on July 25, 2025 by Brett

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. TwoMorrows Publishing, Magma Comix, and Graphitti Designs, Abstract Studio, NBM, William M. Gaines, Agent, Inc., Humanoids, a joint filing by 13 publishers, GAMA, the Ad Hoc Committee of Consignors, Cryptozoic Entertainment, and Image Comics have each filed objections to the motion. Diamond’s bank lender JPMorgan Chase filed a “limited objection” and “reservation of rights.” That’s about 1/3 of the 128 publishers mentioned as impacted in Diamond’s initial motion.

In many of those objections, it has been pointed out that who actually “owns” the consignment stock hasn’t been determined by the court. The Ad Hoc Committee, a group of creditors that has formed to represent the interests of those who provided goods to the debtor, has filed a motion to stay the decision as to what to do with the stock.

The Ad Hoc Committee, due to many of the reasons brought up in the objections has asked the court to:

the Debtors have obtained a declaratory judgment from this Court confirming that the proposed Stock to be sold is, in fact, property of the Debtors’ estates; which declaratory judgment can only be achieved through
- (i) the Debtors’ commencement and service of a complaint on each of the respective consignors who delivered the Stock proposed to be sold;
- (ii) opportunity for discovery by all parties to the declaratory judgment action; and
- (iii) dispositive motions and/or trial on the causes of action identified in the Debtors’ prospective complaint; along with any subsequent appeals or expiration of deadline to appeal any such final order; and
the Debtors have amended the Motion to clarify which Stock is proposed to be sold.

The issue has been delayed with objections extended partially due to so many objections as well as San Diego Comic-Con. We expect a lot of movement on the topic next week.

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Diamond Chapter 11

Diamond Motions to Sell its Shares of Diamond UK

Posted on July 23, 2025 by Brett

During the Chapter 11 proceeding of Diamond, a big question has been out there, the fate of Diamond UK. Today, Diamond submitted a motion to sell the shares of Diamond UK that Comic Exporters and Comic Holdings hold. Diamond UK was not part of the assets purchased by Universal Distribution and Sparkle Pop in the initial sale of assets during the proceeding. Diamond has been working to sell the rest of its assets.

Diamond UK is being sold for $2.1 million, with the motion calling it a “heavily-negotiated purchase price” with a $200,000 deposit made in good faith.

Revealed in the motion is that the purchaser is an entity formed by members of the UK-based management team of Diamond UK. None of Diamond’s officers or directors are part of the ownership group of the newly formed entity.

As part of the deal, JPMorgan Chase Bank would have to release Diamond UK from its obligations as a guarantor. The sale would be “free and clear of all encumbrances.”

As with everything in a bankruptcy, the sale must be approved. You can check out the motion, “sale order,” and “purchase agreement,” below. We’ll be going through all the docs more thoroughly, San Diego Comic-Con beckons right now.

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Multiple Objections Deemed Deficient in Objection to Diamond’s Motion to Sell Consignment Merchandise

Posted on July 21, 2025 by Brett

But… a bunch of the filings are deficient according to the court. In other words, they don’t follow the rules for filing.

Objections filed by William M. Gaines, Agent Inc., NBM Publishing Inc., Abstract Studio, Inc., Graphitti Designs, Molten Core Media, LLC aka Magma Comix, and TwoMorrows Publishing have all been deemed “deficient” by the Clerk of the Court. The reason given:

Appearance of counsel is required. (Local Bankruptcy Rule 90101)

Local Bankruptcy Rule 9010-1 in Maryland requires a corporation to be represented by an attorney in bankruptcy proceedings. Petitions and pleadings have to be signed by an attorney. There are some exceptions as to what corporations can do and how they can participate, but in this case, they need a lawyer to file the objection.

To fix they issue, they need to get an attorney who’s barred by the District Court.

Liminal Esports LLC had their filing deemed deficient by the court and it is now stricken from the official record as they didn’t correct it in time.

Diamond Chapter 11

Image Objects to Diamond’s Motion to Sell Consignment Stock

Posted on July 18, 2025 by Brett

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, GAMA, the Ad Hoc Committee of Consignors, and Cryptozoic Entertainment have each filed objections to the motion. Diamond’s bank lender JPMorgan Chase filed a “limited objection” and “reservation of rights.” Image Comics has now filed a motion objecting to the motion. That’s about 1/3 of the 128 publishers mentioned as impacted in Diamond’s initial motion.

In Image’s objection, they come out swinging calling it a “brazen attempt by the Debtors to misappropriate Image’s inventory.” They state they’ve been in discussion with Diamond for months for the return of the inventory as well as provide contractually required reporting but were told they’d need to wait to see if Diamond’s new owner Sparkle Pop took on everything. From Image’s filing, it would seem that Sparkle Pop didn’t do that.

Image contends that it wasn’t a consignment agreement with Diamond. Instead, Diamond was an “exclusive agent” tasked with “selling, billing,
warehousing, shipping, collecting, returns handling, and other customary customer services for distribution of Image’s Products.” And, while Diamond held the inventory, it was really Image’s property and then ownership of that merchandise transfers to whomever purchases it. At no point does Diamond own the product.

Image contends this is a blow to Diamond’s statement in their original motion that publishers needed to file a UCC-1 financing statement to preserve their ownership of the merchandise. Instead, since Diamond was just an “agent,” there was no need for that filing.

Image also pokes whole in Diamond’s claim most of their inventory was purchased outright across all of the debtors. Debtors include Diamond Comic Distributors, Diamond Select Toys, and more. Image says that statement is a bit false and that Image didn’t do business with the rest, just Diamond Comic Distributors and that percentage of consignment crosses a threshold sent to make Diamond’s proposal ok according to previous court rulings and bankruptcy law.

Image has threatened discovery between Diamond and its creditors, JPMorgan Chase, to show that JPMorgan Chase Bank knew that Diamond was largely consignment and did not own the inventory it’s intending to sell to pay back JPMorgan.

In the filing we get details on Image’s switch to Lunar Distribution.

In 2023 Image switched exclusively to Lunar
In April 2024 Diamond became Image’s exclusive agent in the overseas market
Image asked Diamond to transfer inventory to Lunar
Diamond failed to transfer a large portion of that inventory without explanation
Of the total $2,909,486.23 worth of Image inventory left at Diamond today, $1,231,783.92 (~42%) is inventory that Diamond failed to transfer to Lunar’s possession per Image’s direction.
Diamond failed to do what was asked

Image also raises the question as to who owns the property Diamond is trying to sell. Since that hasn’t been established, it can’t go forward. It says it’ll be injured through the sale and receive nothing for it.

You can read Image’s full objection below as well as Eric Stephenson’s declaration of support for Image’s objection.

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Diamond’s lender JPMorgan Chase has a Limited Objection and Reserves Rights Concerning Diamond’s Consignment Plan

Posted on July 17, 2025 by Brett

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, GAMA, the Ad Hoc Committee of Consignors, and Cryptozoic Entertainment have each filed objections to the motion. Now, Diamond’s bank lender JPMorgan Chase is getting in on the action with a “limited objection” and “reservation of rights.”

JPMorgan Chase Bank is Diamond Comic Distributor’s lender, having loaned out money to keep them operating through the chapter 11 process. The maturity of that is August 23, 2025 currently.

JPMorgan Chase in their motion through “reservation of rights,” stand that they need to be paid first. So, any money from the consignment sale should go towards JPMorgan Chase to pay off the loans and then publishers or anyone would come second. They also want to be able to object to “any Consignment Sale that is legally or factually insufficient or impermissible, proposed in derogation of Lender’s consultation rights, not proposed in good faith, or violative of the terms of the Final DIP Order or applicable law.” In short, they want to get paid, and need to get it all paid, and if they’re not first, they’re going to object to it. If the court or anyone attempts to mess with that… objection!

In short, JPMorgan Chase has planted a flag for the future when it comes to decision concerning Diamond’s consignment motion.

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Diamond Chapter 11

Cryptozoic Files a Motion Objecting to Diamond’s Consignment Plan

Posted on July 17, 2025 by Brett

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, GAMA, and the Ad Hoc Committee of Consignors have each filed objections to the motion. Cryptozoic Entertainment got an objection in yesterday as well but had issues with their filing.

While submitted before the deadline, like the William M. Gaines, Agent, Inc. objection, there was an issue with their filing. Cryptozoic had a lawyer file their objection and the attorney is not a member of the bar of the District Court so will need “Admission Pro Hac Vice.” It’s weird rules, but it’s rules that need to be followed.

On to Cryptozoic’s filing…

In their 29 page filing, Cryptozoic points out, like all of the other filings, that though the product was provided to Diamond on consignment, as per their agreement, the inventory remains the property of Cryptozoic. Pointing out a previous legal case, they state that the consigner, aka Cryptozoic, takes priority over the trustee in bankruptcy. And, the creditor, the bank that loaned Diamond money, should have known this when they extended credit for the bankruptcy.

Included in the filing is Cryptozoic’s agreement with Diamond as well as a list of inventory.

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Diamond Chapter 11

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