Diamond bankruptcy settlement hits snag as Sparkle Pop files objection

A settlement in the bankruptcy of distributor Diamond Comic Distributor was reached last month, but this week the company holding the warehouse assets of Diamond, Sparkle Pop, filed an objection. The settlement would have returned consignment inventory that has been held since January 2025 to be returned to companies including Paizo and Green Ronin, while $892,913 held in escrow from sales Sparkle Pop made of that held inventory would go to the Diamond Estate to pay off debts.

In their objection, Sparkle Pop claims they are owed $1 million in rent for the warehouse that holds the consignment inventory along with $433,270 in processing fees for the inventory it has sold. Another objection to the settlement is that it would allow third party companies to retrieve the inventory, arguing that the warehouse is a working distribution center with “floor-to-ceiling pallet racks requiring specialized equipment and trained operators”.

Sparkle Pop previously attempted to seize the inventory for unpaid rent in June, but that motion was denied.

Green Ronin Publishing, one of the members of the settlement, released a statement on the GoFundMe page for their legal expenses fighting for the return of their inventory:

We are, at long last, moving towards a resolution of our dispute with Diamond and if all goes well, we will be getting our books back before Xmas. As you may recall, the bankruptcy court appointed a trustee to oversee the liquidation of the remaining Diamond assets (the majority were bought by two companies, Universal Distribution and Sparkle Pop, last year). Last month the trustee and our group submitted a proposed settlement to the judge. Before anything else happens, the judge will have to accept the proposal. After that, there is still the matter of getting our books out of the Mississippi warehouse, which Sparkle Pop now owns. You know that saying that possession is nine-tenths of the law? Well, I won’t feel comfortable until our long-held hostage stock is out of that warehouse.

Our group, the Ad Hoc Committee of Consigners, must give some things up in this deal. Notably, a pot of money the court is holding from sales Sparkle Pop made after it had been ordered to stop selling. Green Ronin, thankfully, only has a small amount of money in this pot, but some of our cohort companies are giving up substantial cash to tie this all up. In addition to getting our product back, we’ll also be clear of our old contract for good and free from various forms of legal jeopardy that have come up in this case. It’s not everything our group wanted, but it’s a good deal for us nonetheless. Everyone just wants this resolved and over. I must once again give kudos to our lawyer Cate, who has been a rockstar throughout this process.

The next time I update I will hopefully be able to tell you that our books are safely in our warehouse. As always, thank you for all your support. We’d have lost all our consigned books without the money to put up a legal defense.

Thanks,
Chris

“Consignment inventory” is when a publisher or other manufactuere/wholesaler provides product to a distributor to sell on their behalf, with the consignment seller getting a portion of the sale price. The inventory still belongs to the publisher during this time.

 

[Cadence]

Never looked up Sparkle Pop and their owners Ad Populum before.

Except maybe for the Party City section in some Staples at some point in the future, not much for me to boycott in protest. (Chia Pets for an inside joke, but wouldn't buy one, and I don't remember getting anything from Wizkids).

 

[Riley]

Never looked up Sparkle Pop and their owners Ad Populum before…
…I don't remember getting anything from Wizkids).

Doesn’t Wizkids make Pathfinder prepainted (and unpainted) minis?

That’s pretty awkward.

 

[Weiley31]

Can you buy it direct from Green Ronin? I know it's also good to support your FLGS, but if you want to help the stress and anxiety of RPG publishers, buying directly from them should give them more profit margin than buying it from your FLGS.

Book: $92.00 CAD
Shipping to Canada via Green Ronin: $40.00
Duty determined by Fedex at border: probably around $40 because that is what I paid last time for the Dragonbane Bestiary. Which is the last time I ordered a RPG directly from the US.

So no, I'm not going to pay $80 of (shipping + duty) for a book worth $92. edit: Even less because it would put $40 in the pockets of the Weirdo who has been pummelling Canada for a year now.

I've already supported them buying PDFs during the crisis and backed Wardens of the Bluerose Campaign.

I gotta agree with Thierry here. If I had a choice between supporting the publishers or my FLGS where its quicker/cheaper to get a book I want, I'll go the FLGS route any day of the week.

Hate to say in this day and age, if the Publishers can't make it cuz we do the FLGS to avoid extra cost, well a wise person said it best:

 

[ECMO3]

Book: $92.00 CAD
Shipping to Canada via Green Ronin: $40.00
Duty determined by Fedex at border: probably around $40 because that is what I paid last time for the Dragonbane Bestiary. Which is the last time I ordered a RPG directly from the US.

So no, I'm not going to pay $80 of (shipping + duty) for a book worth $92. edit: Even less because it would put $40 in the pockets of the Weirdo who has been pummelling Canada for a year now.

I've already supported them buying PDFs during the crisis and backed Wardens of the Bluerose Campaign.

Well the duty you would pay goes to Canada not the wierdo. IF you ship that book back to the US the $40 at the border would go to the wierdo.

I get what you are saying though.

What I don't understand about this whole thing is how they can hold their product hostage and not allow them to move it while simultaneously charging them rent for storage.

 

[aramis erak]

If you or I did it, sure. Because it's a corporation doing it - even if it is a corporation formed solely for the purpose of buying the remnant inventory of Diamond - and because they're using the courts to do it, then it's a purely civil matter to be decided by the courts.

Corps can and do occasionally get hit with criminal charges.

 

[Morrus]

I gotta agree with Thierry here. If I had a choice between supporting the publishers or my FLGS where its quicker/cheaper to get a book I want, I'll go the FLGS route any day of the week.

Hate to say in this day and age, if the Publishers can't make it cuz we do the FLGS to avoid extra cost, well a wise person said it best:
View attachment 447525

And people complain that companies don't care about them...

 

[KYRON45]

I gotta agree with Thierry here. If I had a choice between supporting the publishers or my FLGS where its quicker/cheaper to get a book I want, I'll go the FLGS route any day of the week.

Hate to say in this day and age, if the Publishers can't make it cuz we do the FLGS to avoid extra cost, well a wise person said it best:
View attachment 447525

And if the publishers die...what do the retailers sell?

 

[TheAlkaizer]

And if the publishers die...what do the retailers sell?

Another product from another publisher that used the opening and managed to sell a product that strikes a cost vs perceived value that convinces customers. Just like in all industries.

I understand RPG publishers are often smaller businesses. I also understand there's an international context that affects shipping.

But I'm not playing 50$ of shipping and duties for a 60$ book. It's simple economics. There's very few games I want so much that I would consider doing so.

Some publishers have warehouses in Canada or find different solutions where the shipping and duties are more in line with the rates I see with most other line of products. And I understand that requires money, contacts and work. But that's part of entrepreneurship.

The barrier of entry to make stuff and ship it is much lower than in the past. Someone can make a zine, make a shopify website and mail stuff pretty easily. But being able to send a product somewhere is not the same as being able to really engage with customers and do business.

At the end, I'm a customer and I make simple value decisions about where my money goes and if a 60$ book becomes a 110$ order, you've lost a sale.

 

[A2Z]

Book: $92.00 CAD
Shipping to Canada via Green Ronin: $40.00
Duty determined by Fedex at border: probably around $40 because that is what I paid last time for the Dragonbane Bestiary. Which is the last time I ordered a RPG directly from the US.

So no, I'm not going to pay $80 of (shipping + duty) for a book worth $92. edit: Even less because it would put $40 in the pockets of the Weirdo who has been pummelling Canada for a year now.

I've already supported them buying PDFs during the crisis and backed Wardens of the Bluerose Campaign.

As a fellow Canadian I'm with you on the shipping. We didn't create this issue, why should we pay exorbitant shipping fees because of it?

But anyway, I will say this, you can self declare items through customs instead of paying the equally exorbitant courier fees. It's been awhile since I've done it, but If you email FedEx they must provide you with a customs document. And from there... well I can't remember exactly, I did this years ago. And I live in a border town, so I just went down to customs, and paid $2.50 instead of the $25 UPS wanted to charge me. I can try to find more info if you're okay paying $40 shipping if you don't have to pay FedEx brokerage fee.

 

[Willie the Duck]

One of the twists is that Sparkle Pop owns portions of the company formerly known as Diamond Comic Distributors.

They are suing themselves.

Back in 2009 or so I was looking at properties and going to foreclosure auctions. One of the people bidding was the previous owner. Before foreclosing, they had moved out the appliances* and absolutely trashed the place**. They then were going to buy the place back at auction (with a brother-in-law with unblemished credit as proxy buyer) for pennies on the dollar, fix the mess, move the appliances back in, and have the place back for a fraction of the housing-boom-era loan they had previously been under. It was quickly bid past my level of interest and I left, so I don't know if they ended up getting the winning bid.
*this part I assume, the rest they were surprisingly up front about.
**I believe conveniently in ways that a skilled individual could fix for thousands of dollars, not tens/hundreds of thousands