Dark Horse, Dstlry, Oni, Titan And Vault Do Diamond Bankruptcy Deal

As Bleeding Cool reported back in August, the trustee had already reached a settlement with the Ad Hoc Committee of Consignors, made up of Ablaze, American Mythology, Avatar, Battle Quest, Action Lab, Drawn & Quarterly, Fantagraphics, Green Ronin, Hermes Press, Living the Line, Paizo, UDON and Zenescope, as well as Dynamite and Boom. That agreement did not include Sparkle Pop and drew an immediate objection over rent, storage and processing fees. The Palik deal, filed in September and now approved, is structured differently and brings Sparkle Pop into the settlement.The Settlement Agreement states that the deal “will fully, completely, and finally resolve the disputes and any and all other disputes, known or unknown, asserted or unasserted, by and among them.” Each publisher must choose a Pik&Pak option. Once that is done and any required payment is made, “Sparkle Pop shall release to such Palik Consignment Group Member the applicable portion of Consigned Inventory identified to that member on Schedule 2 free of any claim or interest of Sparkle Pop.” These are the current consignment amounts for the Palik Consignment Group publishers, the number of items held, and the total cover price:

• Oni: 287,011 units, $5,466,625
• Magnetic: 92,878 units, $1,912,225
• Dark Horse: 108,674 units, $2,879,015
• Vault: 104,500 units, $643,267
• Alien: 40,098 units, $676,042
• Titan: 45,732 units, $581,222
• Aspen: 43,594 units, $459,221
• Massive: 58,078 units, $324,658
• Graphic Mundi: 14,267 units, $334,697
• Black Mask: 40,073 units, $255,636
• DSTLRY: 16,027 units, $162,305
• Heavy Metal: 15,577 units, $87,839
• Panini UK: 6,483 units, $132,796

Publishers must choose a “Pik&Pak” option, or they can ask Sparkle Pop to destroy specific stock at no extra charge (with a certificate of destruction required under the order):

• Option 1: Sparkle Pop keeps 4% of the wholesale value of remaining stock (wholesale defined as 50% of MSRP), then picks, packs and palletises the other 96% at no extra charge. Sparkle Pop chooses which titles make up its 4% and can sell them. This option has been chosen by Aspen, Black Mask, DSTLRY, Heavy Metal, Massive, Panini UK, Alien Books, Titan, Vault and Dark Horse. Titan gets a side deal: about 31 pallets already staged for pickup are carved out of the extra fees.
• Option 2: pay Sparkle Pop 2% of the wholesale value in cash, and get all remaining inventory picked, packed and palletised. Magnetic, Oni and Graphic Mundi have chosen this option.

There is a clock on this. “Following receipt of the required Pik&Pak Option payment, Sparkle Pop shall make the identified Consigned Inventory available for pickup or shipment within 10 business days of the receipt of payment. Available shall mean that the Palik Consigned Inventory shall be made available at the Warehouse loading dock. Sparkle Pop shall provide written notice to each Palik Consignment Group Member when its Consigned Inventory is available at the Warehouse loading dock. If the Consignment Group Member does not remove its Consigned Inventory within 30 days after the date of the written notice by Sparkle Pop, unless there is an executed written agreement in place between Sparkle Pop and that Palik Consignment Group Member before the 30-day deadline, the Consigned Inventory shall be deemed abandoned and Sparkle Pop shall have the sole and absolute discretion to dispose of that Consigned Inventory.”

There’s also the matter of money. Sparkle Pop has claims for storage and handling, and there is money held in escrow from sales made during the bankruptcy proceedings: $840,151 held by the court, $48,254 of which is attributed to the Palik Group, and $478,490 still held by Sparkle Pop, $105,856 of which is attributed to the Palik Group. The settlement agrees to “release the entire Court Registry Escrow to the Trustee” and release “the SP Escrow to Sparkle Pop, who shall retain the full amount of the SP Escrow for its Storage Expenses and Processing Fees.” In addition, once the Ad Hoc settlement is approved, “the Trustee shall disburse to Sparkle Pop $308,890.00 from the Court Registry Escrow.” The trustee also assigns to Sparkle Pop inventory tied to default judgments against Digital Manga, Netcomics and Valiant Entertainment, inventory covered by the Image Comics settlement and from publishers in neither this deal nor the Ad Hoc deal.

The broader consignment pool still sitting in Olive Branch has been put at nearly $50 million at cost. Since then, inventory has aged, sales proceeds have been forfeited, legal bills have mounted, and capital has been tied up for the better part of two years.

The Ad Hoc settlement remains pending, with a hearing set for early November after Sparkle Pop’s objection. The filing suggests that the remaining parties will negotiate an amendment along similar lines. If so, that would largely close out the consignment inventory fight that has run since Diamond’s January 2025 Chapter 11 bankruptcy filing and the subsequent sale of operating assets. Individual deals, such as the one with Image Comics that Bleeding Cool first reported, had already cleared shelves from the warehouse.

For retailers, the open question is how quickly this stock actually reaches stores and whether it retains commercial value after sitting for so long. For the Palik publishers, it is at least a court-approved route to recovering goods they have argued all along they own. The long war over Diamond’s Olive Branch warehouse is ending for one group of houses; the logistics of getting the books out, and the parallel dispute with the Ad Hoc group, continue. Guess it’s time to write the book? You can use this Diamond tag to keep up with the latest on Bleeding Cool. Here’s a timeline if you want to catch up…