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Sparkle Pop/Diamond II Lawsuit Claims Dynamite Owes Them $1.7 Million

Now Ad Populum/Sparkle Pop/Diamond II is suing Dynamite Entertainment, claiming that the publisher owes them $1.7 million.

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In a recent federal lawsuit filed in the United States District Court for the District of New Jersey, Sparkle Pop/Ad Populum has sued Dynamite Entertainment, also known as Dynamic Forces, claiming that the publisher owes them $1.7 million.

Ad Populum/Sparkle Pop bought the business end of Diamond Comic Distributors, Inc. as part of the Chapter 11 bankruptcy auction and is currently operating it as Diamond II.  As part of their purchase of Diamond, the debtor's business, "DCD transferred its assets to Sparkle Pop pursuant to an asset purchase agreement ("APA"), including all receivables due under the consignment agreement with Dynamic as well as the rights to sue to recover all amounts due."

In the filing, they accuse Dynamite of breaching an exclusive distribution agreement signed in 2015, and are seeking to recover what they say is an amount due from Dynamite, which they claim to be in excess of $1.7 million. "As part of the commercial relationship, Dynamic agreed to reimburse DCD for storage fees, freight costs, certain marketing-related expenses, and other costs (collectively, the "Recoverable Costs"). DCD fulfilled its side of the bargain. It sold vast amounts of consigned Dynamic Products, remitting millions of dollars to Dynamic. But Dynamic breached the agreement by failing to reimburse DCD for its costs and fees as agreed," and "The total amount of such receivables due was calculated by DCD and Sparkle Pop to be in excess of $1.7 million dollars."

This comes as Dynamite Entertainment has secured a court order for an expedited hearing on its motion to compel discovery from Diamond Comic Distributors, Inc., the original debtor in this bankruptcy, in their attempt to define certain monies owed by Diamond, the debtor, over half a million, as an administrative claim and more easily recoverable, part of a total debt owed to Dynamite in excess of a million dollars.

Dynamite is also part of the Consignment Group, a collection of publishers who have been fighting against Diamond, the debtor, over their claims on consigned stock, which is owned by the publishers but held by the debtor. Dynamite Entertainment has not yet publicly responded to the new allegations, but I assume a countersuit from Dynamite will be filed within the next week or two, which may provide a very different perspective on the matter.

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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 comic books The Flying Friar, Holed Up, The Avengefuls, Doctor Who: Room With A Deja Vu, The Many Murders Of Miss Cranbourne and Chase Variant. Lives in South-West London, works from The Union Club on Greek Street, shops at Gosh, Piranha and Forbidden Planet. Father of two daughters, Amazon associate, political cartoonist.
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