Diamond objects to the Motion to Compel them to Assume or Reject their Distribution Agreement with Titan Publishing

While the sale of Diamond to Universal Distribution and Ad Populum was closed today, there’s still a lot to go before all of the legal wranglings are over and we can fully end the Chapter 11 saga of Diamond. The latest news is that Diamond has objected to Titan Publishing‘s motion for Diamond to assume or reject its distribution agreement with the publisher.

Diamond’s motion states they have twenty days after the closing on the sale to “designate additional executory contracts for assumption.” The object is that Sparkle Pop should be given that time to evaluate if it wants to assume the agreement.

After the 20 days, Sparkle Pop will reject certain contracts not assumed by the purchase and Diamond anticipates that “they will reject Titan’s Distribution Agreement if it is not designated.”

Short version, Diamond thinks that Titan’s motion is too early and that there’s still 20 days for Diamond’s new owners Sparkle Pop to decide what agreements they want to continue.

But, there’s more…

Titan wants the decision to be made so it can know what to do with its goods that Diamond currently has. Diamond’s motion states that if Spark Pop changes its mind about Titan’s contract it’s a “rejection” of it, not a “termination.” A “termination” allows Titan to get their goods back, a “rejection” doesn’t. By keeping the goods, Diamond would be able to sell them and then pay Titan “consistent with the Bankruptcy Code and the Distribution Agreement.”

Further, Diamond in its motion highlights the court can’t change its agreement with Titan, standing by its “rejection” vs. “termination” hair splitting. That if the court decides that Diamond needs to make a decision before the 20 days is up, it’d need to be a “rejection” which means Diamond can keep the goods to sell.

Diamond also adds that Titan’s request of an administrative expense is early as well. Diamond and Titan don’t know the amount for orders that “may or may not be filled accurately and properly.”

You can read all of Diamond’s motion below:

Source: Graphic Policy