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Publishers Motion to Dismiss Diamond’s Adversary Complaints

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Diamond Comic Distributors

One of the major outstanding issues with Diamond‘s bankruptcy is the status of consignment inventory. Diamond currently has stock that was provided to it by publishers on a consignment basis. That stock is currently physically held by Sparkle Pop which purchased some of Diamond’s assets, including taking over the warehouse where these are stored, though they don’t have a right to sell it (which they did and there was drama around that).

Diamond wants to sell the consigned goods to help pay back its creditors. Publishers obviously want their stock back. A judge put a stay on the decision which has been playing out for months. Diamond then went a submitted adversary proceedings against publishers, over 30 of them. In short, instead of this decision being handled at a macro level, the judge said Diamond could sue each publisher individually to figure out the product status.

Now, Diamond is in chapter 7 and due to key dates having passed, the Consignment Group, which is made up of multiple publishers, has submitted motions in each of those adversary proceedings to dismiss the complaints. Oddly a filing had the Trustee of the chapter 7 process selling the consigned goods to Sparkle Pop so it’s unclear how this motion and that clashes.

Filings by Massive Publishing, Oni Press, Panini, Alien Books, Titan Comics, Vault Storyworks, Dynamic Forces, Aspen, Black Mask Studio, Dark Horse, DSTLRY, Heavy Metal, and Magnetic Press were all revealed today were submitted to the court to “Dismiss Adversary Proceeding Complaint(s).”

The motion goes right into it stating that Diamond has not submitted facts to back up their complaint and discovery has not revealed evidence, and that the court can dismiss it over this.

The Complaint(s) in this case is devoid of any meritorious allegations that might possibly support Plaintiff’s claims; thus, this Complaint must be dismissed.

The filing then goes on about the agreement between Diamond and the publishers saying it’s “executory in nature” and Diamond’s obligations were to ship goods, properly store the goods, and pay the publishers when the goods ae sold.

On December 19, 2025, Diamond’s Chapter 11 was switched to Chapter 7 and with that, they had until February 17, 2026 to assume or reject an executory contract. The deadline to assume or reject their contracts has been an issue throughout the Chapter 11/Chapter 7 case with the deadline to do so pushed out over and over. The latest request to extend the deadline was denied in early February.

February 17 has come and gone and since the deadline wasn’t extended again and the agreements weren’t assumed, then they can be deemed rejected.

Because the agreement has been rejected, they are now terminated the Consignment Group argues and the agreement is now in breach and the next steps due to that breach need to be determined.

The Consignment Group feels the agreement has answers to that and as per a Supreme Court case, the publishers would then retain the rights it has received under the agreement. The motion lists out the various ways the agreement can be terminated (something we have mentioned before) and then goes on to state since the Consignors are owed money still and no proof of claim has been filed, the agreement has been terminated by its own terms.

The agreement lays out what happens next:

  1. Effect of Termination
    d. Except as provided herein, the termination of this Agreement shall not relieve or release any party from any of its obligations existing prior to such termination. Upon termination of this Agreement, title to all material containing the
    Trademarks, or Seller’s copyrights, service marks, or similar rights shall be deemed to have automatically vested in Seller. Unless otherwise agreed to by Seller, Buyer shall immediately deliver such material to Seller, at Seller’s cost. Buyer, at Seller’s option, may destroy such material at Seller’s cost, and upon such destruction furnish Seller a certificate of destruction satisfactory to Seller and signed by an officer of Buyer.

In short, the Buyer (aka Diamond) needs to return the goods to the Seller (aka publishers) with the Sellers paying for shipping. The Buyer can also destroy the material if the Seller wants, with the Seller paying for that.

The Consignment Group’s motion then concludes that due to all of that, the consigned goods are now clearly owned by the publishers and the Adversary Complaints should be dismissed.

This is a pretty big motion that might be the first real step to settle the outstanding question as to who owns the consigned goods. With the lapse of the date concerning the acceptance or rejection of existing agreements, the publisher’s case gets stronger.

We’ll be watching this closely and report when the court makes a decision regarding this key issue.

Dynamic Forces, aka Dynamite, responds to Sparkle Pop’s Breach of Contract Lawsuit. Files Counterclaim Against Sparkle Pop!

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Dynamite Entertainment

In mid-September, Sparkle Pop filed a lawsuit against Dynamic Forces, aka Dynamite Entertainment, for what it claims as breach of contract. Sparkle Pop is the new entity that has taken over Diamond Comic Distributors in its chapter 11 process. Sparkle Pop claims Dynamic has “made millions of dollars from its long-standing commercial relationship” but “failed to reimburse Plaintiff for certain costs incurred.” The lawsuit is an attempt to recover those costs. The lawsuit claims that Dynamic was to reimburse Diamond for “storage fees, freight costs, certain marketing-related expenses, and other costs.” Sparkle Pop is looking for damages including interest and costs, disbursements, and attorney’s fees. Dynamic and Dynamite are suing Sparkle Pop/”new” Diamond and claiming they are owed over $500,000 themselves.

Now, Dynamic has responded to Sparkle Pop’s claims and…. filed a counterclaim seeking damages from Sparkle Pop!

Dynamic’s response gets right into things, admitting to simple statement of facts while denying much of the rest. This is a pretty standard response but there are some highlights:

Under Parties: “Denied in part, Sparkle Pop is not the holder of all right title and interest to the assets and receivables owing to Diamond Comic Distributors (“DCD”) pursuant to an Order of the United States Bankruptcy Court for the District of Maryland”

Under Factual Allegations: “denied that any contract, receivable, and/or consignment related to Dynamic was purchased through the DCD Bankruptcy sale.”

Those two are setting it up that Sparkle doesn’t have the rights to the claim/contract it’s suing under. In short, old Diamond should be the one suing if anyone, and that was settled it would seem.

Now, to the counts.

Breach of Contract

…denied that Dynamic agreed to pay for certain fees and expenses incurred by DCD at all times relevant to the claims asserted in this matter.

And with all of that denial, Dynamic has requested the judge to rule against Sparkle Pop. It then lists a whole lot of reasons that Sparkle Pop doesn’t have an argument and failed to make its case.

But, where it gets interesting is that Dynamic has included a counterclaim in their response.

In it, Dynamic focuses on the consigned goods, a heated point of contention. When Sparkle Pop purchased Diamond’s assets, it didn’t purchase the consigned goods. But, Sparkle Pop wound up selling those goods and pocketed the money. They’ve been called out and the money is currently is sitting in a bank account controlled by the court until a decision is made as to who “owns” the consigned goods that remain and the ones that have been sold. None of that can be argued.

Because of that, Dynamic is going after Sparkle Pop for the sale of the goods in the amount of $644,403.35 plus attorneys fees and more.

This one should be interesting since it’s now a fact in the court and Sparkle Pop has admitted to doing exactly what Dynamic has claimed.

Dynamic is seeking damages, interest, costs and disbursements. The challenge will be the current ongoing debate in court about the consigned goods and who has a right to them, which is still in the process of being determined.

Dynamic and Diamond’s Agreement and Diamond’s Chapter 11 Heading to Dispute Resolution Approved

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Friday delivered two orders from the court in the case surrounding Diamond’s chapter 11 process.

Last week, we brought the news that Diamond, the Official Committee of Unsecured Creditors, JPMorgan Chase Bank, the Consignment Group, the Ad Hoc Committee of Consignors, and Sparkle Pop all agreed to send multiple issues in Diamond’s chapter 11 process to the Court’s Bankruptcy Dispute Resolution Program.

Instead of a bunch of hearings were lawyers argue it out. Everything this presented to a judge who quickly makes a decision. A decision is expected to be made by October 29, 2025.

The approval by the court also gave the Resolution Advocate the “same immunity he has as a judge under federal law and common law from liability for any act or omission in connection with the mediation and from compulsory process to testify or produce documents in connection with the mediation.”

The other order was a deal between Dynamic Forces and Diamond concerning their issue over administrative expenses Dynamic felt it was owed by Diamond. That is resolved with “old” Diamond. Dynamic Forces fight with “new” Diamond is ongoing.

Dynamic Forces/Dynamite and “old” Diamond Come to an Agreement. Fight with “new” Diamond Continues

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Dynamite Entertainment

The drama regarding Diamond’s chapter 11 process seems to never end and has twists and turns worthy of a great soap opera. In May, Dynamic Forces, aka Dynamite filed a motion to get some of the money it felt it was owned by Diamond. Since Diamond’s chapter 11 filing in January 2025, Dynamic/Dynamited delivered $509,114.21 worth of goods they hadn’t been paid for. It motioned the court to be paid for that as well as administrative expense.

There’s also issues with goods being sold by “new” Diamond, we don’t know how much of Dynamite’s, as well as the ongoing issues regarding consigned inventory that “old” Diamond wants to sell to help pay back some of its loan to JPMorgan Bank.

Dynamic/Dynamite and “old” Diamond have come to an agreement when it comes to some of their issues being fought out currently in court. The new “consent order” would resolve some of the motion Dynamic/Dynamite filed “seeking the entry of an order granting the allowance and requiring payment of an administrative claim.”

The agreement between the two companies proposed is:

  1. Dynamic’s claims against Diamond for goods sold up to May 15, 2025 are “satisfied in full by setoff through the satisfaction in full of the Dynamic Forces Revolving Loan Agreement/Promissory Note (the “Note”) dated on or about April 14, 2015; which Note shall be deemed satisfied in full.
  2. Claims for goods sold on or after May 16, 2025 (when “new” Diamond began) are to continue. In short, “old” Diamond is off the hook while “new” Diamond has proceedings still going on against it.

This comes after “new” Diamond’s owner Ad Populum/Sparkle Pop filed a lawsuit against Dynamic/Dynamite seeking over $1.7 million for breach of contract and looking for reimbursement for expenses. That was filed in mid-September.

Sparkle Pop is Suing Dynamic Forces aka Dynamite, for Breach of Contract. Seeking over $1.7 million.

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Dynamite Entertainment

2025 is the year of comic related lawsuits and court filings. In September Sparkle Pop filed a civil action against Dynamic Forces, aka Dynamite Entertainment over a breach of contract.

In its introduction, Sparkle Pop claims Dynamic has “made millions of dollars from its long-standing commercial relationship” but “failed to reimburse Plaintiff for certain costs incurred.” The lawsuit is an attempt to recover those costs. The contract between Dynamic and Diamond (the original, “old” Diamond) began on October 1, 2015 and Diamond was Dynamic’s “exclusive worldwide distributor. Dynamic was to reimburse Diamond for “storage fees, freight costs, certain marketing-related expenses, and other costs.” The lawsuit claims Dynamic failed to reimburse Diamond for those costs and fees. Sparkle Pop, the owner of “new” Diamond, is suing over that and claims they have made efforts to collect the receivables since they closed in purchasing Diamond in May 2025.

The lawsuit’s counts are:

  • Breach of Contract – Dynamic and Diamond had an agreement and Diamond performed its obligations under the agreement. Dynamic failed to reimburse Diamond and Sparkle Pop for those costs and expenses. That total sum is in excess of $1.7 million dollars.
  • Quantum Meruit Recovery – Diamond has performed its services which has benefited Dynamic. Dynamic has been “unjustly enriched” and Sparkle Pop is entitled to recover the reasonable value of the services provided. An amount will be determined at trial but it includes interest, costs, and more.

Sparkle Pop is looking for damages including interest and costs, disbursements, and attorney’s fees. A summons was issued to Dynamic on September 15.

Where it gets crazier is that Dynamic and Dynamite are suing Sparkle Pop/”new” Diamond and claiming they are owed over $500,000 themselves.

Dynamic Forces/Dynamite Files a Motion to Compel Diamond to Produce its Discovery

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Dynamite Entertainment

Discovery is a pretty big deal when it comes to lawsuits. The basic is, one side asks the other for all documents related to a topic. All of those documents then need to be sorted through to try to find important details that might help your case. It can be a very expensive process depending on how many documents are turned over and can include things like emails, letters, texts, and internal chats like Slack. Destroying documents or not providing what’s asked for can be a big deal in a case. In the Diamond chapter 11 process, discovery has been brought up numerous times by different parties. Dynamic Forces, aka Dynamite Entertainment, has filed a motion with the court to compel Diamond Comic Distributors to provide what was asked for.

Dynamic Forces currently has a dispute with Diamond concerning over $500,000 in unpaid post-petition invoices. A hearing about this is scheduled for October 22, 2025. On July 31, 2025, Diamond was served document requests which were due August 27, 2025. There were no objections or a response to that request.

On September 12, 2025, Dynamic’s counsel sent an email asking where Diamond was with the process as it was overdue by a week at this point.

Diamond’s counsel responded that Diamond would “do their best” to respond prior to September 17 and asked for the discovery request to be sent again.

Dynamic points out again in their motion that there was no response or objections to the request and therefore the failure by Diamond to object waives their objection to that request.

Dynamic in their motion notes Diamond has not complied with the request in the time frame given or responded at all to the request, so they’ve filed a motion with the court to compel Diamond to do so.

Dynamic and Dynamite want the discovery because they feel Diamond’s objection to their motion was extremely vague.

While the Debtors do not dispute that Dynamite delivered goods to the Debtors postpetition and that certain amounts are owed on account of the goods delivered, the Debtors dispute the asserted claim amount ($509,114.21) in the Motion. In particular, the Debtors believe the asserted amount is overstated and fails to account for certain of the Debtors’ setoff rights. The Debtors are in the process of reconciling the asserted amount with the Debtors’ books and records, and therefore, reserve the right to supplement this Objection to further contest the alleged amounts sought in the Motion and further reserve all rights, claims and causes of action related thereto.

They hope discovery will help them figure out what their defense is prior to the October 22, 2025 hearing.

Dynamite has requested that the Court hold a hearing on the motion between September 29 and October 4, 2025.

Update: The Court has granted Dynamic/Dynamite’s request for an expedited hearing which will be held September 26 at 1:30 PM.

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.

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.

Dynamic Forces/Dynamite’s Motion to Expedite their Hearing to get their $1 million owed by Diamond Denied

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A hearing was held today regarding the motion filed by Dynamic Forces to expedite their claim against Diamond. In Dynamic Force’s motion, they say they’re owed over $1 million for shipments made to Diamond and Ad Populum. They state the majority is administrative expenses and their original motion highlighted $509,114.21 worth of goods that were sent to Diamond.

In Dynamic Forces’ motion they stated that due to the money owed, it doesn’t “have the funds to make payroll next week” if it isn’t promptly paid by Diamond.

This puts Dynamic Forces and Dynamite in a clearly difficult spot as they’ve stated the financial hardship they would be under if not paid.

While we don’t know the exact reasons given for the denial, the motion states “For the reasons stated on the record at the hearing held on July 2, 2025.”

We’ll see if we can find out any more details as to the logic of the decision. What this means for the future of Dynamic Forces/Dynamite Entertainment is unknown.

Dynamic Forces Files a Motion to Expedite its Claim Against Diamond in order to meet Dynamite’s Payroll

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Dynamic Forces, aka Dynamite Entertainment, has filed a motion to expedite the hearing concerning its claim against Diamond. The proposed dates are July 3 or July 7 for the hearing.

The motion states that Dynamite is owed over $1 million for shipments made to Diamond and Ad Populum, “a majority of which are administrative expenses.” The original motion had mentioned $509,114.21 owed as well as lawyer fees, etc. Dynamite is described as a “small company” with less than 30 employees and “does not have the funds to make payroll next week, if it is not promptly paid by the Debtor.“

In the motion, Dynamite states there’s other publishers unpaid “millions of dollars of shipments post-petition.”

The lack of communication is also raised, that Diamond has had weeks to prepare for a hearing and have not communicated with Dynamite regarding the motion.

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