Will the Diamond Bankruptcy case ever end? Based on my readings, major bankruptcies like this often drag on for years, and this one is approaching it’s second birthday….but it appears that a MAJOR matter has been settled: the fate of the consignment inventory.
We we reported last week, the court approved a settlement between “The Palik Group,” of publishers, the Diamond Estate and Sparkle Pop, the company in possession of Diamond’s remaining inventory.
And late last week, the court approved a previous settlement between Diamond and “The Ad Hoc Group” of publishers including Ablaze, American Mythology, Avatar Press, Battle Quest Comics, Action Lab, Drawn & Quarterly, Fantagraphics, Green Ronin Publishing, Hermes Press, Living the Line, Paizo, UDON Entertainment and Zenescope with BOOM! Studios and Dynamite tagging along.
BUT this followed closely on Sparkle Pop agreeing to drop their objection to the settlement, which was originally filed in August.
Both settlements have provisions for the estate to receive money from the sale of the comics that had been held in escrow, while they send representatives in to find and pack up the disputed inventory. But the Ad Hoc settlement was much more suspicious about Sparkle Pop and contained all kinds of language aimed at making sure more inventory had not been illegally sold and holding Sparkle Pop liable for damages.
Predictably, Sparkle Pop had fired back with an objection, claiming they needed to be paid for storing the inventory and so on. It seemed like some very big wrenches had been thrown in the settlement…but these objections were suddenly dropped.
Why? My best guess is that some kind of behind the scenes deal was made to finally get this mess sorted out. Both The “Ad Hoc” publishers and the Palik Group (named after their lawyer, I’ve learned), still have to send representatives in to find and pack up the inventory that still has value. Remaining inventory is to be destroyed, according to the settlement.
Apparently, the process of poking around the warehouse has already begun, as reported at Graphic Policy. A “motion to compel discovery” was approved, and former Diamond vp of operations Shawn Hamrick, accompanied by only one other brave companion, was sent in to inspect the inventory last week, with eight hours each approved for October 26th and 27th. They were to be accompanied by a Sparkle Pop employee and were only able to visually inspect the stuff and not move anything without permission.
This was only the court order, so we don’t know how it actually went. After all this time, this inspection conjures images of Frodo and Sam venturing into Shelob’s lair but it was probably the nice clean warehouse that we’ve all seen in photos over the years.
After more than a year, the bankruptcy court has finally approved for all the publishers involved in the litigation to get their stuff back. All the adversary cases will be dropped, and life can go on, for the most part.
At least that’s how it seems today. This case has had a lot of twists and turns so we’ll keep checking that court docket daily for updates.
