The judge in the Diamond bankruptcy case has ordered Sparkle Pop to stop selling goods held on consignment, provide a complete accounting of what has been sold, and to turn over the funds from those sales to the court to be held in escrow until the dispute is resolved.
Diamond, Sparkle Pop, and the publishers who initially consigned the goods are currently arguing about who actually owns them. In August, Diamond asked the court to order Sparkle Pop to stop selling the consigned inventory, and Sparkle Pop responded that it already had (see “Sparkle Pop Responds on Consignment Sales”).
On September 12, the court ordered Sparkle Pop to immediately stop selling any goods held on consignment by or on behalf of any debtors, remove all consigned inventory from its website and order forms, and file a certificate within three business days stating that it has complied.
In addition, within three business days, Sparkle Pop must provide the court with a detailed written accounting of sales of consigned inventory and pay the gross proceeds of the sales into the Registry of the Court, which will hold the money until the court makes a final order as to its disposition.
Diamond had asked for the court’s approval to seize and sell the goods, but instead the court ordered Diamond to initiate a separate case against each of the consignors (see “Order Clarifies Next Steps on Diamond Consignment Inventory”).
Toy company Ad Populum, the parent company of NECA and WizKids, acquired Diamond’s comics distribution and toy company assets in the bankruptcy sale and created Sparkle Pop to handle those assets.
Source: ICv2
