Posted in: Ablaze Publishing, AfterShock, Black Mask Studios, Comics, Current News, Dark Horse Comics, Dynamite, Fantagraphics, Image, Titan, Vault | Tagged: Ad Hoc, Ad Populum, Consignment Group, diamond

Who Had Been Selling Diamond Consignment Stock Since May 15?

Who was selling Diamond Comic Distributor-held consignment stock since May 15? The Debtors say it was Sparkle Pop.

Published Mon, 18 Aug 2025 13:57:06 -0500

by Rich Johnston

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The current hearing in Baltimore for Diamond Comic Distributors' chapter 11 bankruptcy case concerns a number of comic book publishers who object to the recent plans of the Diamond Comic Distributors, the debtors, to sell the stock owned by publishers on consignment to raise money to pay off the bank loans, not the publishers.

But according to the Ad Hoc Committee and other objectors, someone has already been selling consigned stock from the Diamond warehouse without court approval. At the time that this came to light in court filings, Diamond Comic Distributors, Inc., the debtor in this case, claimed that it's not them, or to explain how it could possibly be anyone else. Previously in our Diamond bankruptcy coverage, we heard from the Ad Hoc Committee, representing publishers 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, in filing that;

"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 Diamond Debtors say Ad Populum is selling the stock

Now, in recently unsealed court transcripts from the 5th of August, Paige Topper of legal firm Saul Ewing on behalf of the Debtors, addressed concerns about ongoing sales, claimed:

"I want to be very clear for the record that the Debtors are not currently selling consigned inventory, and they have not sold any consigned inventory since the closing date of the sales of substantially all assets to the two purchasers, Universal and Sparkle Pop… The Debtors have become aware of the fact that Sparkle Pop, one of the purchasers of some of the Debtors' assets, has been selling consigned inventory on or after May 16th. The Debtors promptly notified Sparkle Pop, both the principals at Sparkle Pop and Sparkle Pop's counsel, to immediately stop any sales as to the consigned inventory because consigned inventory was explicitly excluded from the acquired assets under that APA. The Debtors have sent several written communications to Sparkle Pop's counsel and have verbally informed both the principals at Sparkle Pop and their counsel that they're not to be selling the consigned inventory, that it's in violation of the APA, and the Debtors have demanded that the proceeds of any such sales be remitted back to the Estates. Sparkle Pop has yet to respond to the Debtors' various outreach."

And according to filed reports, the Debtors have no money coming in from sales of goods and almost no employees to pay either, if these figures are accurate.

: Filing screencap

: Filing screencap

So they haven't sold it, but instead point the finger at Ad Populum. Craig Palik, on behalf of The Consignment Group, who represent Dark Horse Comics, Dynamite Entertainment, Aspen, Black Mask, Dstlry, Heavy Metal, Magnetic, Massive, Oni, Panini UK, Alien Books, Graphic Mundi, Titan and Vault, noted that the picture on this matter was still emerging at that time,

"We've also been concerned, because as we've sent this discovery out to our clients, many, many of them are concerned that their consignment goods are being sold illegally at this point, without permission. The concern was whether the Debtor was doing it, whether Sparkle Pop was doing that. It appears that perhaps it's Sparkle Pop, based on the representations today. We received a representation in an e-mail yesterday in response to an inquiry received that's saying that neither Debtor nor Sparkle Pop was selling any of these consigned goods, but many of my clients have received, I believe, solid evidence of the fact that that's going on."

While Catherine Hopkin, with YVS Law, representing the Ad Hoc Committee, told the court;

"We did not hear from the Debtor, Your Honor, until late last week regarding who was selling the property post May 15th. We really didn't know who that was… we didn't know who has control over the inventory of the warehouse. We now know we believe that it's Sparkle Pop based on what the Debtors told us."

And as to their desire to extend the length of this case, criticised by other counsel,

"with respect to the administrative costs, my clients' inventory alone, I think the wholesale value is something approaching $20 million. The cost of storing at a facility that the Debtor is already maintaining and that the agreements provide that the cost of storage is an obligation of the Debtor, the value of this property far outweighs the minimal storage cost to get this question right."

Paige Topper did, however, say that settlement plans have been proposed with publishers regarding the consignment stock.

"The Debtors have spent time preparing a proposal for a potential resolution of the objections to the Consignment Motion. That proposal has been shared with the significant Objectors… And it includes sort of two alternative proposals for a resolution." Despite this, she said, "No Objector has taken the Debtors up on their offer in a substantive way."

While Adam Fletcher, for Image Comics, pushed back against the Debtors' liquidation arguments, asking

"what's to stop a Debtor from asserting that they own any piece of property, selling it, and then saying, what's the harm? I can give you the money."

That was back on the 5th of April, and since then, it looks like Image Comics and Debtors have come to an arrangement, and have taken up a settlement proposal, or, at least, proposed one of their own, which was accepted. We may find out more today.