JPMorgan submits a “Reservation of Rights” in Response to the Settlement Between Diamond and some Publishers

In early August, Diamond and its trustee Morgan W. Fisher and 15 publishers announced a settlement regarding consigned goods being held by Diamond and warehoused by Sparkle Pop. To catch folks up, when Diamond declared bankruptcy, it held a large quantity of product in its warehouse that was on consignment. After some time, Diamond claimed it had a right to sell the consigned goods to help pay down its debt and that nothing would go to the publishers. The publishers claimed it was their property and that when Diamond declared bankruptcy it triggered a whole bunch of different things that would allow them to get their product back. This has gone on for about a year and a half that resulted in all sorts of off-shoot lawsuits and a lot of behind-the-scenes negotiations.

As part of the settlement, the 15 publishers can get their goods back and have to pay for the picking and packing of the inventory. There’s also a small monetary payout to the publishers while (old) Diamond and its trustee gets a windfall of money for consignment goods sold while all of this process played out.

That agreement has to be approved by various parties, including JPMorgan Chase Bank which has loaned (old) Diamond a considerable amount of money so it could function and go through the bankruptcy process. JPMorgan in their filing reiterates it wants to get paid, and should be one of the first to get paid when that time comes.

In the filing, it states that JPMorgan has an “allowed claim in an amount not less than $6,541,667.19.” That total doesn’t include the interest, costs, and attorneys’ fees that continue as long as this process plays out.

But, basically, the bank punts allowing it to speak up at a future date regarding the issue.

WHEREFORE, Lender expressly reserves the right to (a) raise any objection it may have with respect to the terms of the proposed Joint Motion, and (b) to be heard before the Court with respect to the entry of any order approving the Joint Motion and to raise additional arguments or objections in connection therewith.

You can read the filing below:

Source: Graphic Policy