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Diamond Comics Bankruptcy Hearing Will Continue At 2 PM Tomorrow

Diamond Comics Distributors' Chapter 11 bankruptcy hearing on consignment liquidation matters in Baltimore has closed for the day and will continue at 2pm tomorrow

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Bleeding Cool has been informed that the current Diamond Comic Distributors Chapter 11 bankruptcy hearing, which began yesterday and continued through today, has finished for the day. And will continue tomorrow, at the Bankruptcy Courts of Baltimore, Maryland, tomorrow from 2pm.  No matters were decided by the court today.  Motions on the Diamond UK sale and the Stay on the Diamond Debtors plans to liquidate stock were granted yesterday.  At issue before the court today was the Ad Hoc Committee's Motion Seeking Entry of an Order Requiring the Debtors to Assume or Reject Executory Contracts. Per their filing, this is viewed by the publishers as a key step in their efforts to obtain the return of the consignment inventory.  Some of the key language excerpts from that filing:

Even absent the May E-Mail, it is uncontroverted that the Debtors or their purchasers have sold Consignor goods post-petition without payment in full. The Debtors should not be permitted to continue operating under the Consignors' agreements at the sole risk of the Consignors, who will either have (i) growing administrative claims against the Debtors' estates; (ii) causes of action against the Debtors' purchasers who sold Consigned goods without proper assignment and cure of their agreements; (iii) the Debtors' DIP Lender to the extent that it received proceeds of unauthorized sales of the Consignors' property, or (iv) most likely, a combination of these causes of action against multiple parties.

The Debtors' own arguments in the Objection to Titan's Motion support a finding that they should have to assume or reject the Contracts now. As stated in their Objection, the Debtors requested a delay in the determination of Titan's Motion to Assume or Reject until Sparkle Pop could decide whether they wished for Titan's Distribution Agreement to be assumed and assigned, and if the agreement was not assigned to Sparkle Pop that the Debtors would likely reject the agreement.

Pursuant to the Contracts, the Consignors may reclaim goods upon termination. See Obj. ¶ 39 (stating "the Debtors retain the rights to the goods and may sell them in the ordinary course" prior to termination). The Contracts also provide that termination occurs upon the Debtors' failure to make payment when due and such failure continues for 15 days after written notice to the Debtors that such amounts are owing.

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Rich JohnstonAbout Rich Johnston

Founder of Bleeding Cool. The longest-serving digital news reporter in the world, since 1992. Author of The Flying Friar, Holed Up, The Avengefuls, Doctor Who: Room With A Deja Vu, The Many Murders Of Miss Cranbourne, Chase Variant. Lives in South-West London, works from The Union Club on Greek Street, shops at Gosh, Piranha and FP. Father of two daughters. Political cartoonist.
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