Ad Populum company Sparkle Pop, LLC is emerging as an additional obstacle to the return of the nearly $50 million in consignment inventory at the center of a dispute between publishers and Diamond Comic Distributors. The consignment goods are currently stored in the Olive Branch, Mississippi warehouse Sparkle Pop took over from Diamond as part of its purchase of comic-related assets in May.
While Sparkle Pop is not taking sides in the dispute between the consignment inventory publishers, who want their inventory back, and the bankrupt estate of Diamond Comic Distributors, which wants to seize and sell the inventory, it is asserting an interest in the dispute, via a filing this week. Specifically, Sparkle Pop says the bankruptcy estate owes $500,000 in rent for the inventory, an amount that increases by $125,000 each month.
Sparkle Pop also stated that it would be “…an extremely expensive and time-consuming process… to organize, pack, and move the consigned goods to the loading dock,” and that they are not organized by consignor or packaged for shipment.” While it is willing to perform that work, it wants to be paid “market rate” for the tasks.
Based on the past due rent, money owed as fees for consignment goods sold prior to a court order which halted the practice (see “Court Orders”), and potential fees for preparing the consignment goods for pick-up, Sparkle Pop “…contends that it may have a warehouseman’s lien under Mississippi law” on the consignment goods.
The Sparkle Pop filing was in response to recent motions by consignment publishers to have their inventory returned. A court ruling that it was too late for the bankrupt estate to assume Diamond’s consignment agreements paved the way for potential return of the goods. Unfortunately, the bankruptcy trustee is now appealing that ruling (see “Trustee Appealing“), putting more uncertainty back into the dispute. Sparkle Pop is urging the judge to reject the publishers’ motion.
In its filling, Sparkle Pop did not respond to allegations in the motion from the Ad Hoc Committee of Consignors that it was continuing to sell consignment inventory as recently as February in violation of a court order.
Source: ICv2
