The judge in the Diamond Comic Distributors bankruptcy case has denied two consignors’ motions to release their inventory to the publishers after a ruling on February 26 that the bankruptcy estate could no longer assume or reject the consignment contracts because time had expired. The motions, filed by the Ad Hoc Committee of Consignors and BOOM! Studios, had argued that the consignment agreements had been terminated and the inventory should be returned (see “Creditors Request Inventory”).
The motions were denied due to an appeal to be filed in federal district court by the bankruptcy trustee, who is requesting that the bankruptcy court’s ruling on the consignment agreements be overturned (see “Diamond Bankruptcy Trustee Appealing”). The actual appeal has not yet been filed. The motions can be renewed after the appeal is decided.
The other major group of consignment vendors, the Consignment Group, filed a similar motion this week. The judge has not yet ruled on that motion but will presumably deny it in due course.
Sparkle Pop, which controls the warehouse in which the consignment inventory is stored, has also emerged as a potential obstacle to the release of the inventory. It is seeking payment of past due rent and of fees for handling the inventory if it needs to be prepared for release to the publishers (see “Sparkle Pop New Obstacle”).
Source: ICv2
