Posted in: Ablaze Publishing, Comics, Dark Horse Comics, DC Comics, Dynamite, Fantagraphics, IDW, Titan, Valiant, Vault | Tagged: bankruptcy, diamond

Diamond Bankruptcy Court Orders Money in Escrow Released to Publishers

Diamond Bankruptcy Court orders proceeds from sales of inventory by Sparkle Pop, which were held in escrow during mediation, should be released to the publishers.

Published Sat, 20 Dec 2025 10:27:05 -0600

by Rich Johnston

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As the United States Bankruptcy Court for the District of Maryland converts Diamond Comic Distributors' bankruptcy case from an attempted Chapter 11 reorganisation to Chapter 7 liquidation, after an agreement between Diamond Comic Distributors Inc., the debtors and its primary lender, JPMorgan Chase, there has also been a decision on what to do with the revenue collected by Sparkle Pop from the selling of consigned stock, and then held in escrow during what became an ongoing mediation process between the debtor, the publishers, the bank, and Sparkle Pop.

To step back a little, dozens of comic book publishers had comic book and merchandise stock held by Diamond for distributing to stores when they needed it, which the publishers owned, and Diamond took a cut of sales and charged storage fees for. The bankruptcy saw the debtors claim that stock, totalling tens of millions in value, for the debtors' estate. Meanwhile, Ad Populum/Sparkle Pop, which had acquired the business aspects of Diamond, began selling that stock to comic book stores. After legal challenges, the revenue from those sales was held by the Court until the matter resolved. Prior to the conversion to Chapter 7, the parties had been engaged in ongoing mediation attempts.

According to court documents, Sparkle Pop transferred $840,155, representing the proceeds from the relevant sales they made, into the Court's Registry. The Consignment Group originally made post-Petition administrative claims for $675,069.95 of those funds. However, according to the debtor, over $500,000 of those claims were for Dynamite alone, " The great majority of this amount – $509,114.21 – was allegedly owed to one consignment creditor, Dynamic Forces, Inc. a/k/a Dynamite Entertainment ("Dynamic"). The amounts owed to Dynamic were fully satisfied by the set-off set forth in the Consent Order Resolving, In Part, Motion of Dynamic Forces, Inc." This leaves $165,955.74 for the rest of the Consignment Group's claims. Meanwhile, the Ad Hoc Group made claims of $163,368.34. Because of this math, the 7th DiP Credit Agreement between the debtor and JPMorgan Chase called for $300,000 to be placed into escrow to satisy these claims.

The court has directed the distribution of that $300,000, split between the two groups, with $156,000 to counsel for the Ad Hoc Committee of Consignors representing Ablaze, American Mythology Productions, Avatar Press, Battle Quest Comics, Action Lab, Drawn & Quarterly, Fantagraphics, Green Ronin, Hermes Press, Living the Line, Paizo, Udon and Zenescope, and another $144,000 to counsel for the Consignment Group representing Dark Horse Comics, Dynamite Entertainment, Aspen, Black Mask, Dstlry, Heavy Metal, Magnetic, Massive, Oni, Panini UK, Alien Books, Graphic Mundi, Titan, and Vault. Those funds will be distributed to consignors as partial payment of asserted administrative claims accrued before the 15th of May, 2025.

It's a drop in the ocean and is unlikely to cover legal fees, but it's something. However, the order makes clear that these payments are not final. If ongoing litigation later determines that some or all of those administrative claims should be disallowed, consignors would be required to return the money.