In a rapid series of decisions, the judge overseeing the Diamond Comic Distributors bankruptcy hearings being held this week in Baltimore approved the sale of Diamond UK and, at least temporarily, denied a bid by Diamond to liquidate the inventory it still holds in an effort to pay down debt it owes its banks. That attempt has been hotly contested by publishers, who collectively stand to lose millions of dollars.
In his first ruling, the judge approved the motion to sell Diamond UK to a group of company executives for $2.1 million, according to Graphic Policy. The U.K. arm had not been part of the assets acquired by Universal Distribution and Ad Populum, and the judge’s decision did not come as a surprise.
The legal fight over the control of Diamond’s assets, however, has been much more contentious. When word first surfaced that Diamond planned to sell the publishers’ inventory rather than return it, a group of companies banded together to oppose the motion. According to several comic industry publications, the bid by the publishers’ ad hoc committee to stay the attempt by Diamond to sell off the inventory has been approved. According to Bleeding Cool, the decision means that Diamond will now have to individually sue each consignment vendor, publisher, and manufacturer whose stock it holds on consignment if it wants to liquidate any of the assets in its possession, including comic books.
The fate of the inventory came more into question over the course of the week when it was revealed that Ad Populum's Sparkle Pop division has been selling some consigned inventory. Both the publishers and Diamond are trying to force Ad Populum to stop selling the inventory even as a ruling on Diamond's motion to allow it to sell the inventory has been delayed until September 30.
In the meantime, Diamond reached an agreement with Image Comics that in exchange for dropping certain claims, Diamond will return the Image inventory it has to the publisher.
The fight over the inventory is just the latest issue to arise from a bankruptcy process that has been extraordinarily messy from the beginning and which shows no signs of ending smoothly.
This story has been updated.
