Diamond Comic Distributors has asked the bankruptcy court to order Sparkle Pop, the company that acquired its comic distribution and toy company assets, to stop selling consignment inventory, pay for what it’s sold to date, and order Sparkle Pop to pay Diamond’s attorney fees and punitive damages.
The motion argues that Sparkle Pop’s actions, which first came to light earlier this month, are “ongoing, knowing and willful violations” of the automatic stay issued immediately on filing of the Chapter 11 bankruptcy case, which prevents any third party from seeking to exercise control over the property of the estate. While the actual ownership of the consignment inventory remains very much in dispute (see “Next Steps on Diamond Consignment Inventory“), Diamond argues that because it is in possession of the property and has contractual rights over it, the stay applies.
Diamond alleges that Sparkle Pop has continued to sell consignment inventory despite being told to stop, and has not paid for any of it.
The amounts are significant, totaling $1.4 million through July 18, based on exhibits attached to the motion. Diamond alleges that Sparkle Pop has continued to sell consignment inventory since that date, so the amount to date is undoubtedly significantly larger. Although still incomplete, this is a lot more than the partial amount of $347,791 alleged in the Consignment Group motion in early August (see “Consigners Ask Court“).
Consignment inventory from both comic and game companies is involved, with Dynamite Entertainment (vendor name is Dynamic Forces) and Paizo the vendors with the largest amounts. Here are the amounts over $10,000 from the chart showing sales from May 16-July 8:
- Dynamic Forces: $563,775
- Paizo Inc: $201,096
- Oni Press Inc.: $99,618
- Zenescope Entertainment Inc: $52,312
- Avatar Press Inc: $50,280
- Titan Comics: $38,928
- Fantagraphics Books: $35,690
- American Mythology Productions: $29,611
- Udon Entertainment Inc: $24,982
- Living The Line: $23,900
- Antarctic Press: $23,396
- Ablaze: $20,46
- Goodman Games LLC: $15,511
- Archie Comic Publications: $13,513
- Magnetic Press Inc.: $11,736
- Clover Press LLC: $11,527
- Gemstone Publishing: $11,300
- Netcomics: $10,851
- Massive: $10,457
This adds another difficult issue to a bankruptcy case already spiraling, with Diamond in danger of administrative insolvency (see “Diamond in Jeopardy“), and multiple disputes swirling around the core case (see “Sparkle Pop Amends Complaint,” and “Alliance Entertainment Sues“).
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