As we reported on Wednesday, that was a big day for the Diamond Bankruptcy Boondoggle, with a hearing to review a motion from Debtor Diamond enjoining Sparkle Pop, owners of “new” Diamond, to stop selling consignment inventory and hand over the $1,353,364 they’d made from selling it.
So what happened?
The court docket only says that a hearing was held and consent is due. From talking to some people with knowledge of the proceedings, however, it seems that the court sided with Diamond, and ordered Sparkle Pop to stop selling the comics. This isn’t a big surprise, as their defense didn’t really seem to hold water and it was pretty clearly spelled out that they weren’t supposed to sell it. Also, Sparkle Pop had aready stopped selling thecontexted consignment inventory back in July.
It was also ruled that the money from the sale would be held by the court, as proposed by the Ad Hoc Committee.
So basically, things went the way one would have expected.
But the big battle looms on September 30th, when the court will rule on the key matter of who owns that consignment inventory. Is it Debtor Diamond, who claims that the lack of UCC-1 forms filed by publishers means they can dispose of it? Or is it the publishers, who claim through highly technical precedents that no UCC-1 forms were needed and they own it?
The clock keeps ticking…
Comics’ own Jarndyce v. Jarndyce. The legal cases will last long after NuDiamond has ceased to be.
Wait – I thought that the company that bought Diamond was called AdPopulum, or whatever, not Sparkle Pop.
Sparkle Pop is a division or holding company AdPop created for the Diamond assets they bought. As far as I could tell, it didn’t actually matter, and there was a lot of cross-pollination across the AdPop empire; the HR rep who terminated me on Wednesday came from AdPop, but my payroll contact was with Rubies Costuming, the benefits package was NECA, and the chief IT person was Party City. There was probably a rhyme or reason, but I have no idea what that might be.
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