The bankruptcy trustee in the Diamond Comic Distributors bankruptcy case has filed a motion outlining a comprehensive settlement with consignment vendors not covered by the settlement agreement motion filed in August (see “Settlement Proposed“) and Sparkle Pop LLC, which provides for release of claims against consignment inventory by both the estate and Sparkle Pop.
The proposed settlement, which must be approved by the bankruptcy court, covers consignment inventory in the Sparkle Pop warehouse from publishers Aspen Comics, Black Mask Studios, DSTLR Media, Heavy Metal International, Magnetic Press, Massive Publishing, Oni Press, Panini UK, Alien Books, Graphic Mundi, Titan Publishing, Vault Comics, and Dark Horse Comics.
This represents an improvement over the settlement proposed with the first group of consignment publishers in August, which drew an objection from Sparkle Pop over storage and logistics fees (see “Sparkle Pop Objects“). The new settlement provides that Sparkle Pop receive either 4% of the consignment inventory or 2% of the wholesale value of the consignment inventory as pick and pack fees. The consignment vendors covered by the agreement will be able to file Chapter 11 administrative expense claims for those charges.
The agreement also provides that $787,380 held in escrow from consignment product sold by Sparkle Pop will be released to Sparkle Pop. Sparkle Pop will seek tariff refunds on behalf of the estate, and any amounts recovered will be split 50/50 between Sparkle Pop and the estate. In exchange for those concessions, Sparkle Pop will release all claims against the trustee, the estate, the debtors and the consignment vendors that are parties to the agreement.
Under the agreement, the estate will also assign to Sparkle Pop its rights to Image Comics inventory that it obtained via an August 2025 settlement (see “Image Settles“), and to inventory that it obtained via default judgments against Digital Manga, netcomics, and Valiant Entertainment.
This proposed agreement, if approved by the court, may provide a framework for overcoming Sparkle Pop’s objections to the settlement with the other group of consignment group, which would wrap up the long-running issue of the nearly $50 million in consignment inventory that’s been held by the bankruptcy estate for over a year (see “Diamond Seeks to Take and Sell Consignment Inventory.”
Source: ICV2
