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The Ad Hoc Committee of Consignors Submits a Limited Objection to Diamond’s Motion Going After Sparkle Pop

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At the end of August, Diamond submitted a motion with the court going after Sparkle Pop for selling consigned goods that it did not own. Those goods are part of a battle between Diamond, comic and game publishers, and now Sparkle Pop as to who owns the inventory and who should receive any money from the sale of them.

In their motion, Diamond asked the court to enforce a stay that prevented the sale of the consigned goods while other legal matters were being decided and Diamond felt there should be damages paid for it too.

Now, the Ad Hoc Committee of Consignors, which represents some of the publishers, have submitted a “limited objection” to Diamond’s motion. While that might seem odd, it is limited and an objection to certain aspects.

The Ad Hoc Committee of Consignors is making an objection as to certain aspects. The Consignors support the relief requested by the Debtors so long as:

  1. it is without waiver of their argument as to ownership of the stock and legal ramifications thereof;
  2. any order granting the Motion requires that any proceeds of Sparkle Pop’s sales of the consigned inventory are held in escrow by a third party or in the court registry (and not held by the Debtors), pending a further ruling on ownership of the stock at issue and claims by the Consignors and/or Debtors to recovery of those proceeds; and
  3. without prejudice to the Consignor’s right to recover any additional claims against Sparkle Pop to the extent allowed under applicable law.

The short version is that they don’t want this court decision to impact other decisions as to who actually owns the inventory, the money gained from the sales should go into an account not controlled by Diamond or Sparkle Pop until things are decided as to who owns what and who owes what to who, and they still want to be able to go after Sparkle Pop if they choose to do so.

In Diamond’s original motion it included the words “for purposes of this motion” which we took as to ease the concerns of the Ad Hoc Committee. But, that’s clearly not the case and there’s more to worry about and raise to make sure everything is covered.

They Ad Hoc Committee is protecting their previous arguments and trying to prevent Diamond from using this to help its claim it has a right to sell consigned inventory.

What stands out also is this nugget:

Although the Chief Restructuring Office, Robert Gorin, testified in August that the Debtors’ Transition Services Agreement (“TSA”) permits the Debtors to sell consigned stock and then require Sparkle Pop to “pick, pack and ship” that stock at Debtors’ cost, in reality no provision exists in the TSA that gives Sparkle Pop the right to sell the consigned stock.

The Ad Hoc also believes Diamond’s motion would:

…permit Sparkle Pop to continue selling consigned goods absent a Court Order authorizing the Debtors to assign the consignment contracts to Sparkle Pop after first curing any defaults thereunder.

Reading the transcript, what seems to be in question is Diamond’s “hiring” of Sparkle Pop to ship and pack any consigned goods Diamond sells.

We fully expect publishers to step in with their own lawsuits and court motions against Sparkle Pop for the sale of the consigned goods and this might be the first step in exactly that.

You can read all of the documents below:

Knives are out! It’s Diamond vs. Sparkle Pop now over Consignment Sales!

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Diamond Comic Distributors

Once they were allies, but it looks like it’s on between Diamond Comic Distributors and Sparkle Pop. We broke the news that Diamond was throwing Sparkle Pop under the bus by revealing that Sparkle Pop was selling consignment goods in violation of a hell of a lot. The news broke because of the Ad Hoc Committee of Consignors trying to figure out who the hell was selling the inventory and more. Now, a motion has dropped in court by Diamond going after Sparkle Pop for numerous violations. This was one of the things we expected to happen after a stay was put on Diamond’s motion to sell the consigned goods themselves.

The issue is over consignment inventory, which Sparkle Pop did not purchase in the asset acquisition during the chapter 11 process. Diamond has stated that Sparkle Pop has sold consigned inventory and not passed on the proceeds of the sale to Diamond. Diamond has stated Sparkle Pop has done this despite “multiple demands from the Debtors that it stop all consigned inventory sales and turn over all sale proceeds to the Debtors.”

It’s the latest drama in the chapter 11 case of Diamond that has been filled with drama including multiple lawsuits that are still ongoing.

Diamond in their filing states that Sparkle Pop’s sales are in violation of the court’s stay when it comes to anything dealing with the consigned goods and violates the asset purchase agreement.

Sparkle Pop in the asset purchase agreement obtained inventory defined as:

“Inventory” means all inventory, inventory in transit paid for by Seller, finished goods, raw materials, work in progress, packaging, supplies, parts, and other inventories of the Acquired Business, but excluding any Prepaid Inventory. For purposes of clarification, goods held on consignment by or on behalf of Seller as part of the Acquired Business shall not be considered Inventory for purposes of the Agreement.

Consigned goods was not part of the inventory (the part we put in bold above).

Diamond’s motion hopes to enforce the court’s stay as well as “obtain redress” for Sparkle Pop’s actions which includes “actual damages, reimbursement of legal fees, and punitive damages.”

The filing gives a bit more of a peak behind the deal between Diamond and Sparkle Pop. As expected, Diamond has to pay Sparkle Pop for storage of inventory still at the old Diamond warehouse which Sparkle Pop now manages:

pay [Sparkle Pop] a reasonable fee (to be mutually agreed upon in writing) for the storage (including storage costs) of such [consigned] goods, as well as for any and all out of pocket costs and expenses incurred by [Sparkle Pop] in connection with the processing, packing, shipping, or disposal (“Processing”) of such goods.

Diamond discovered Sparkle Pop was selling consignment goods in mid-June 2025. Diamond then demanded Sparkle Pop stop and hand over the sales to Diamond.

A list prepared by Sparkle Pop indicates that the inventory sold through July 8, 2025 was in the amount of $1,353,364 and additional $31,258.60 was sold between July 9 and July 18.

Diamond was told the sales were stopped but continued according to the motion filed. There are consigned goods listed on Sparkle Pop’s website for sale though Diamond told them in June to remove the goods, and they’d help do so.

Diamond’s basis for relief is:

  1. Sparkle Pop Has No Authority to Sell the Consigned Inventory.
  2. The Consigned Inventory is Property of the Estate for Purposes of this Motion.
  3. Sparkle Pop Violated and Continues to Violate Section 362(a)(3) of the Bankruptcy Code by Selling Property of the Estate Without Authority
  4. Compensatory Damages, Punitive Damages, and Corrective Measures Must be Imposed Upon Sparkle Pop to Remedy the Willful Depletion of the Consigned Inventory

Of the four points above, the second’s inclusion of “for purposes of this motion” is important since there’s dispute who really owns the inventory, Diamond or the publishers. A decision about this would not impact the debate as to who really owns the inventory overall.

The exhibits filed along with the motion includes how much was sold by Sparkle Pop broken down by publisher. That includes spreadsheets featuring costs of goods and more.

A motion has been filed as well for an expedited hearing regarding this with a court hearing on September 10 and objections to be filed on or before September 5.

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!

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:

Sparkle Pop Amends its Complaint Against Alliance Entertainment

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Ad Populum vs. Alliance Entertainment

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. During San Diego Comic-Con, that initial complaint was amended with a bunch of changes.

The changes, which you can see below, seems to tighten up the language a bit as well as add some more specifics as to what Alliance is accused of and how it negatively impacts Diamond. That is likely in response to Alliance who said the initial complaint was very general without specifics and examples of what it was being accused of.

Now, Sparkle Pop has expanded its accusation surrounding the theft of trade secrets, laying out exactly what that is including “customer information,” “vendor information,” “employee information,” and “marketing information.” It goes into detail that Diamond has built up a knowledge of the product mixes that customers would be interested in and that a competitor would not know that detail, even if they knew the identity of vendors/customers. Weirdly, it mentions employee compensation as something that was a “trade secret,” when it could easily have been ascertained by just asking individuals. Conversations about salaries and salary ranges seem normal, even among competition.

It now straight up accuses Alliance of never really being interested in Diamond and instead it was all a ruse to expand Alliance’s “reach and its product portfolio.”

There’s a lot of weird statement of details too like getting a list of Diamond employees, something that can be gained from LinkedIn with little effort.

There seems to be an effort with this amended complaint to strengthen Sparkle Pop’s case, it now says that in the acquisition of Diamond by Sparkle Pop, the APA says that Sparkle Pop can now defend Diamond’s “intellectual property” and “trade secrets,” something Alliance has said Sparkle Pop had no standing to do.

What does seem new are details regarding Alliance’s hiring of former Diamond Staff. Mike Schimmel, former head of sales at Diamond, is particularly singled out. The timeline states that Schimmel resigned and only after did Sparkle Pop/Diamond send out an email firing staff. Afterwards, Schimmel obtained that email and Schimmel was not dismissed or fired by Sparkle Pop/Diamond. Further, it says the six other employees hired by Alliance were part of a list that Schimmel provided Alliance.

There does seem to be one error we found. In point 61:

“In particular, several reported that Diamond Comic had made concerted efforts to recruit and solicit Diamond Comic employees at the Los Angeles Toy Fair, held between April 28 and May 2, 2025.”

We think they mean “Alliance had made concerted efforts…”

It would really seem that the possible loss of Amazon as a client is what Diamond/Sparkle Pop is scared of. It’s called out in point 68 and 69 and has been mentioned before.

You can keep up with the full history, including a timeline, of Sparkle Pop vs. Alliance here. You can read the new amended complaint below as well as the “red line” version which shows everything that has been changed from the initial complaint.

Overall, the new amended complaint feels like it’s a bit more focused, a stronger argument, with more details.

Alliance Files a Motion to Dismiss the Lawsuit by Sparkle Pop

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Defendant Alliance Entertainment has filed a 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.

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.

Alliance lists four major reasons the lawsuit should be dismissed, with a whole bunch of bullet points for each reason:

  1. Alliance believes Sparkle Pop lacks standing to enforce the contract. In short, Alliance says it entered the NDA with Raymond James and Diamond Comic Distributors, not Sparkle Pop. Sparkle Pop also is not an “intended third-party beneficiary” of the NDA. Since they’re not a part of beneficiary, Alliance Entertainment states under Maryland Law, Sparkle Pop doesn’t have standing.
  2. When it comes to the theft of trade secrets, Alliance states that Sparkle Pop:
    • A) Has failed to allege it’s the owner of a trade secret;
    • B) What the trade secret even is;
    • C) Sparkle Pop hasn’t shown any protection of the trade secrets beyond stating it operated “according to established information security policies;”
    • D) The trade secrets aren’t really a secret and have been “disseminated to the public.” Customer and vendor lists are out there and Diamond itself released it during the Chapter 11 process;
    • E) Again, it’s stated Sparkle Pop has identified any actual trade secrets;
    • F) Sparkle Pop hasn’t show Alliance acquired any trade secrets by improper means.
  3. There’s no claim stated under the Maryland Uniform Trade Secrets Act. Since Sparkle Pop didn’t show it possessed a trade secret, Alliance acquired one, and Alliance knew it was acquired by improper means, then it should be dismissed.
  4. No “Tortious Interference” is shown.
    • A) There was no employment contract with the former Diamond employees Alliance hired and employees decided to leave due to Diamond’s Chapter 11 filing and an uncertain future;
    • B) Sparkle Pop claims Alliance got Diamond’s transition services agreement, but never showed it was an unsealed version and Alliance had any idea what was in it;
    • C) Employees left not because Alliance “poached” them but their exit interviews show they were “disenchanted” with Sparkle Pop and were searching for new jobs for months.

You can read the full motion below.

Key Documents in Ad Populum’s Purchase of Diamond and lawsuit against Alliance Revealed with Juicy Details

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In the lawsuit between Ad Populum/Sparkle Pop and Alliance Entertainment, a motion to seal documents was denied, resulting in numerous business documents to be unredacted. The documents give a deeper insight into the purchase process as well as Ad Populum/Sparkle Pop’s takeover of Diamond’s assets during the Chapter 11 process.

We’ve put together this center featuring more details as well as a timeline concerning the ongoing lawsuit.

Asset Purchase Agreement

Ad Populum/Sparkle Pop purchased Diamond for a previously reported $7,459,050 less any critical vendor payments and amounts owed to NECA, Wizkids, and their affiliates (those companies are sister companies of Ad Populum/Sparkle Pop. In reality, that $7.5 million isn’t the final amount and there’s a formula involved based on a lot of factors that isn’t yet determined and has some due dates. For instance, Sparkle Pop needs to provide a report to (old) Diamond of the “Incentive Amount” which is a formula that makes my head hurt.

There’s also a lot of who is responsible for what and basically, Sparkle Pop and (new) Diamond is not responsible for the debts of (old) Diamond.

In the APA, Sparkle Pop and (new) Diamond was to “offer continued employment to most employees who are principally engaged in Diamond’s business on the same or similar terms as their current terms of employment. Sparkle Pop doesn’t have to provide continuing employment to any of Diamond’s employees, including, without limitation, senior management or executives. (old) Diamond is responsible for any liabilities like severance earned before the closing date of the sale.” Sparkle Pop gutted key staff not long after its takeover.

There is a Termination agreement which likely covers Alliance Entertainment’s not going through with its winning bid of Diamond and its assets.

Transition Services Agreement

Also revealed is the Transition Services Agreement which covers what Diamond needed to provided Sparkle Pop in the handover. While just interesting to read, there’s nothing very juicy as far as details.

Non-Disclosure Agreement

The Non-Disclosure Agreement (NDA) is part of the lawsuit by Sparkle Pop against Alliance Entertainment. The NDA is dated October 26, 2024, almost three months before Diamond declared bankruptcy showing they knew they were in trouble for quite some time. It lays out the terms that bidders had to agree to including:

  1. The Evaluation Material was to only be used to evaluate the transaction, aka buying Diamond.
  2. Anyone that doesn’t win the bid has to return any copies of the evaluation material.
  3. It defines what evaluation material is and that’s basically anything one couldn’t already get other ways.
  4. THIS ONE IS KEY. Until the deal is done, bidders can’t initiate or maintain contact with any officer, director, employee, agent, customer, creditor, supplier, vendor, or other business associate of Diamond without the permission of Diamond’s CEO.

That last point is a key part in the argument against Alliance’s hiring of former Diamond employees. This is mentioned and highlighted in the cease-and-desist letter that was also released and you can read below.

For a period of two years from the date hereof, you shall not solicit for employment or, directly or indirectly, hire any employee of the Company or any of its subsidiaries with whom you have had contact during the period of your investigation of the Company or its subsidiaries or whose identity you learned during such period; provided, however, that the foregoing provision will not prevent you from soliciting or employing any person who: (i) responds to a general solicitation of employment through an advertisement not specifically targeted at the Company or its employees; or (ii) has not been an employee or an independent contractor of the Company for at least one hundred and eighty (180) days prior to the commencement of employment or service discussions between you and such employee or independent contractor. It is understood that all requests for information, tours and meetings, all questions or discussions relating to the procedures in making a proposal and all communications regarding the Transaction will be directed to the Company’s financial advisor, Raymond James & Associates, Inc. (“Raymond James”). The Company shall be free to conduct the process for exploring a potential Transaction as they in their sole discretion shall determine and to discontinue or change such process (including any previously announced rules or procedure) at any time without notice to you, and none of the Company, Raymond James, or any of their respective officers, directors, employees, agents or affiliates, shall have any liability to you as a result of such process.

When Alliance contacted Diamond employees or vice-versa that were hired will be key to the lawsuit.

Employee Manual

Also part of the legal dispute between Sparkle Pop and Alliance is Diamond’s Employee Manual which you can read in its entirety below.

The manual lays out some of the benefits from the company, its history, its organizational structure, and sister companies among other things to open things up.

It makes it clear that employees are “At Will” in 1.01, a key point raised in Alliance’s objection to Sparkle Pop’s lawsuit. It states that employees are free to resign at any time and Diamond can terminate employment at any time.

Use of confidential business information is also a part of the lawsuit and is first mentioned in the document at 1.06 “Non-Disclosure” and lists examples:

  • compensation data
  • computer processes
  • computer programs and codes
  • contracts
  • customer information (preferences, business plans, etc)
  • customer lists
  • financial information
  • marketing strategies
  • pending projects and proposals
  • vendor information and lists

1.07 “Conflicts of Interest” is also important as it specifically mentions employees can’t use company time, equipment, facilities, etc. to engage in or pursue another business or occupation. Sparkle Pop has intimated this was done by employees.

Exit Interviews

Exist Interviews of the employees who left Diamond for Alliance is also an exhibit Sparkle Pop is relying on for their case. Each is key in why individuals left but also gives us an idea of what work life was like at Diamond and thoughts of the employees about the purchase and subsequent communication/management of Sparkle Pop concerning Diamond.

What’s interesting is it features one less exit interviews than those left. Presented are six employees when seven left the company. An exit interview by Mike Schimmel isn’t present and he’s one of the former Diamond employees at the center of the lawsuit. You can read his declaration in support of Alliance that refutes some of Sparkle Pop’s key claims, with evidence.

Lee Butman left for Alliance and said that he sent out his resume for a few months and needed stability for him and his family. A lack of communication from Ad Populum led to the decision. A “Merchandise Team Manager” at Diamond, he is now the “Buyer – Consumer Product Specialist” at Alliance.

Matt Demory also said he needed to do what was best for his family and that Diamond had lost “too many employees and the core competency” and wasn’t sure how Diamond Book Distributors sales was supposed to function. An “Assistant Manager – Print Team” at Diamond, he’s now a “Buyer” with Alliance Entertainment and specifically highlights that Alliance “has their own systems and way of doing things.”

Joe Lunday who was Diamond’s “Director of Ecommerce Sales” is helping Alliance “build the collectibles and toy program.” Lunday mentions his concern over Diamond’s future as to why he was leaving and that morale was very low with Ad Populum providing no communication. Lunday also highlights a meeting with Ad Populum’s owner Joel Weinshanker that was supposed to be 15 minutes but lasted 4 minutes and felt like it was “2 minutes longer than Joel would have liked.” Lunday described the meeting as off putting and that he walked away with the impression the purchase was really just for Diamond’s warehouse. Others had the sim impression.

Trista Peterson was a “Sales Manager” for Diamond and stressed she wasn’t poached by Alliance and had applied for the company months ago which was allowed according to the above bidding agreement.

Sadie Campos was Diamond’s “Business Development Manager” and it was discovered through LinkedIn she was leaving for Alliance. There is again a mention of a lack of communication even when it came to major events like shutting down Diamond Select Toys.

Ryan Shelkett was Diamond’s “Executive Director of Applications Development” and moved to Alliance as their “Vice President of Purchasing.” Shelkett said Alliance contacted him about a job offer but he had been looking for a job since Diamond’s bankruptcy announcement but had stopped because he was told that he’d receive a retention bonus of $16,000 if he stayed which he had not received as of his exit interview. With Alliance Shelkett noted he and Mike Schimmel would be working in completely different departments than their time at Diamond and his employment with Alliance came about after running into someont.

Cease-and-Desist Letter

Finally there’s the Cease-and-Desist Letter sent to Alliance Entertainment. It highlights the section we highlighted above about contact with employees of Diamond and generally highlights what has been mentioned in Sparkle Pop’s lawsuit.

If you want to keep up with this important lawsuit, check back regularly here or our center where you can get all of the information in one handy place including a timeline.

We’ve Launched “Sparkle Pop vs. Alliance,” the first of Three Detailed Timelines Tracking Diamond’s Various Court Proceedings

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Diamond Comic Distributors

Diamond Comic Distributor’s Chapter 11 process has turned into the thing of drama. There’s be multiple lawsuits that have spung out of it and there’s a lot to keep track of. So, we’ve launched the first of three projects organizing what has happened.

First up is a timeline and court documents for “Sparkle Pop vs. Alliance Entertainment.” Sparkle Pop has accused Alliance of breaking its NDAs and stealing corporate secrets. We’ve highlighted the key moments and compiled all of the documents in a timeline as well as subsequent links to pages further explaining the situation.

We’ll continue on with a similar project for Alliance’s lawsuit against Diamond for fraud as well as Diamond’s bankruptcy as a whole.

Get a taste of the timeline below, which will be updated regularly, as well as the full center with far more here.

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