Posted in: Black Mask Studios, Comics, Comics Publishers, Dynamite, Oni Press, Titan, Vault | Tagged: avatar press, diamond

Comic Publishers Assemble! Against Diamond Comic Distributors, Inc

Comic Publishers Assemble! against Diamond Comic Distributors, Inc over the plans to liquidate all their stock to benefit the banks

Published Thu, 17 Jul 2025 13:27:05 -0500

by Rich Johnston

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Comic book publishers assemble! Diamond Comic Distributors, Inc., the debtors in the Diamond Chapter 11 bankruptcy case has been planning to sell off consigned inventory from hundreds of comic book publishers, as it was their own, to benefit the bankers in this bankruptcy. Yesterday saw a number of coalitions formed by a number of prominent comic book publishers to register opposition to Diamond in this matter.

First up, calling themselves the Ad Hoc Committee of Consignors, which Bleeding Cool can reveal includes our own publisher Avatar Press, they deny Diamond's claim on their stock entirely and that Maryland law says the stock is theirs and unsellable without permission. Indeed, they state that "At least one Consignor, and possibly more, marked their Stock with placards/notices that unambiguously stated that the respective Stock was property of the respective Consignor, Herman and Geer Communications, Inc. d/b/a Hermes Press." So Hermes Press is another.

They also cite previous court cases, including Salander-O'Reilly Galleries, Fariba v. Dealer Servs. Corp and TSA Stores, Inc. v. Wilmington Sav. Fund Soc to make their case, and regarding the banks that to benefit from the case, stated "the DIP Lender was aware that the Debtors dealt in consigned goods and in fact even required the Debtors to submit reports clarifying which of the goods held in its warehouses were consigned (and thus not Eligible Inventory that could be used to calculate the available borrowing base) and which were true inventory owned by the Debtors."

Second up, calling themselves the Consignment Group, led by Dynamite Entertainment, and including Aspen, Black Mask, Dstlry, Heavy Metal, Magnetic, Massive, Oni, Panini UK, Alien Books, Graphic Mundi, Titan and Vault. Amongst other claims, they stated that Diamond has admitted that "the Consignment Group – not the Debtors – hold legal title to and ownership of their respective Consigned Goods, and therefore the Consigned Goods are not "property of the estate" for purposes… of the Bankruptcy Code. For example, the Debtor sends annual notifications to the Consignment Group advising them of their ownership of their inventory and the need to file reports with DeSoto County, Mississippi for purposes of paying their respective Mississippi personal property tax obligations". And gave evidence of that paperwork.

A key point of contention was Diamond's claim regarding the lack of UCC-1 financing statements filed, but the Consignment Group state that this may not apply, as their arrangements with Diamond constituted "true consignments" under state law, not subject to UCC requirements. Additionally, the Consignment Group opposed the sale of any goods consigned after the bankruptcy filing date, arguing that such sales would violate their agreements and that they are entitled to payment as administrative expense claims under the Bankruptcy Code. They also cited legal precedents, including cases like "Whitehall Jewellers Holdings" and "Interiors of Yesterday", which emphasised that ownership disputes over consigned goods must be resolved through formal adversary proceedings. They have also asked that the court hearing, set for next Thursday, be "rescheduled to date after San Diego Comic-Con concludes on July 27, 2025 (an industry-wide convention) that is being attended by many of the members of the Consignment Group."

The Game Manufacturers Association (GAMA), in conjunction with certain of its members, including Skyscraper Studios and Liminal Esports have also joined forces to make similar objections to the liquidation of their stock.

Other publishers that expressed objection separately included William M. Gaines, Agent, Inc, whose lawyers stated "in March 2011, Gemstone Publishing Inc. and Diamond Comic Distributors… entered into a settlement agreement with Gaines Agent. that transferred all right, title and interest in certain inventory… Therefore, the Debtors' may not dispose of or sell the inventory subject to the 2011 Settlement Agreement" and listing the many Gemstone items in Diamond's inventory.

Humanoids objected separately to the Consignment Group but used similar language and case studies in their objections, with specific details saying "On June 6, 2025, the Debtors finally responded to Humanoids' repeated requests for return of its property. The Debtors agreed to collect, coordinate, and load all of Humanoid's the property in accordance with Humanoids' preferences. However, the Debtors did not follow through on their commitment. Since June, the Debtors have refused to cooperate with Humanoids and now seek to sell Humanoids' property. While Humanoids' inventory would certainly make the Debtors' assets more marketable, the Debtors cannot sell what is not theirs solely because they have physical possession of it."

NBM also filed separately, saying "Our inventory was sent to Debtors on a consignment basis per the terms of our supply agreement, and is our property, not Debtors'. My company has a financial interest in selling all merchandise that is still in Debtors' warehouse. Debtors' efforts to circumvent payment for our property will not only impact our company financially, but their selling our product at a great discount will hurt our capacity to sell these products at normal prices. It will also impact our sales through Lunar Distribution (where we were forced to transfer all our business after Debtors' bankruptcy filing)."

Cryptozoic also filed, citing an agreement from 2015 that read, "All Products are to be held by Buyer on consignment and remain the property of Seller until sold by Seller through Buyer. Seller shall retain title to Products while they are stored in Buyer's distribution center, which title will pass to Customers in accordance with Buyer's Terms of Sale."

What happens next week will affect the entire comics industry. Unless it gets delayed till the week after.