Green Ronin Crowdfunding Legal Defense Fund In Fight Against Diamond Distrubutors

Green Ronin Publishing has set up a crowdfunding campaign to help cover legal fees fighting to get back their inventory from Diamond Comic Distributors in what it describes as "a dire financial threat to our company, not just today, but well into the future".

Diamond, which filed for Bankruptcy in January, still holds the stock of Green Ronin and over one hundred other companies in its warehouse, and has asked the court for ownership of that inventory so that it can liquidate it and pay its creditors. The distributor, while being mainly comic-book focused, also serves as distributor for some toy and TTRPG companies, including Green Ronin, Paizo, Goodman Games, and Roll For Combat.

The GoFundMe had raised $17K at the time of writing, with over 200 donations.

Paizo Publishing, also affected, has announced that its upcoming releases will not be available at major bookstores or at Amazon because the company has stopped shipping products to Diamond. This includes 12 August releases and 10 September releases, such as Starfinder Player Core, Starfinder GM Core, Pathfinder Battlecry, and more.

The court has scheduled a hearing on July 21 to hear objections from the affected vendors.

My name is Nicole Lindroos, co-owner of Green Ronin Publishing. Diamond Comic Distributors' recent Chapter 11 bankruptcy has impacted over 100 independent publishers, including Green Ronin, putting us in a very precarious position. Diamond is attempting to use a legal technicality to claim ownership of millions of dollars worth of consigned inventory, which amounts to several hundreds of thousands of dollars for Green Ronin Publishing alone. This is stock that we still own and have not been paid for.

This is a dire financial threat to our company, not just today, but well into the future. We must secure legal representation immediately before the deadline to do so passes.

While there is no "good" time for someone to steal hundreds of thousands of dollars worth of your property to sell for the benefit of their biggest creditors, it is especially challenging given that Gen Con is weeks away. Gen Con is not just a convention for us, it's our most important annual event for connecting with TTRPG enthusiasts, our business partners, and our community, and this year is no exception. We're launching new products and have already committed significant funds to cover everything from booth space, travel (flights, rooms), and most critically, the production of new books and merchandise specifically for the show floor.

Diamond’s bankruptcy and this legal action also mean that Green Ronin has lost its book trade distributor. We are looking for a new partner, but that will take some time. Book trade sales of literary licenses, currently The Fifth Season and The Expanse, are a key part of our strategies for those games. This is especially bad timing for The Fifth Season RPG because we recently received final approvals from N.K. Jemisin and the game is ready to go to print.

We simply don't have the cash on hand to do all of this, pay for an attorney, or participate in any collective legal actions with other publishers in our same position.

The banks are stopping at nothing to wring every last dollar out of Diamond - including taking several hundreds of thousands of dollars worth of Green Ronin product to sell in order to pay Diamond’s debts - but they can't do that, and we've got a legal agreement that says as much. Now, we just need to secure a law firm to represent us in the courts.

The funds raised through this campaign will be used directly to cover the escalating legal fees associated with fighting Diamond's claim in bankruptcy court. This includes attorney retainers, court filing fees, and the costs of pursuing every possible avenue to recover our inventory and protect Green Ronin's assets.

 

[Morrus]

And what's your source for them (or Marvel/Disney, or Warner Bros-Discovery/DC or Dynamite, or Fantagraphics, or Dark Horse, anyone else whose product is caught in this mess) not having filed that statement?

The Diamond court filing from a week or two back. Summarised in an article here on ENW for convenience.

 

[Morrus]

I'm definitely rooting against Diamond, but my understanding is that none of the companies really stand a chance. None of the proper paperwork was filed and and there is precedence already for this type of thing. That's what I've been reading anyway.

With all the usual warnings about getting your legal opinions from the internet, I'm hopeful that Green Ronin and the others can mitigate this in some way. Time will tell, I guess, but I'm rooting for them. I can't imagine how I'd feel were I in that position.

 

[Junkyard Tornado]

And what's your source for them (or Marvel/Disney, or Warner Bros-Discovery/DC or Dynamite, or Fantagraphics, or Dark Horse, anyone else whose product is caught in this mess) not having filed that statement?

Roll For Combat did a video on this topic, you can track it down on YouTube. But my understanding is that that form is expensive to file and with limited profit margins already on these products, it's generally not filed. It's a catch 22. Fill the form out, be protected from a super rare scenario, but lose significant portion of profits. I don't know the math. Because diamond has been a long established company and there's trust, yes exactly... None of the companies have filled out that form. So, they're prob all going to lose the inventory.

 

[Junkyard Tornado]

And what's your source for them (or Marvel/Disney, or Warner Bros-Discovery/DC or Dynamite, or Fantagraphics, or Dark Horse, anyone else whose product is caught in this mess) not having filed that statement?

Roll For Combat did a video on this topic, you can track it down on YouTube. But my understanding is that that form is expensive to file and with limited profit margins already on these products, it's generally not filed. It's a catch 22. Fill the form out, be protected from a super rare scenario, but lose significant portion of profits. I don't know the math. Because diamond has been a long established company and there's trust, yes exactly... None of the companies have filled out that form. So, they're prob all going to lose the inventory.

 

[Junkyard Tornado]

And what's your source for them (or Marvel/Disney, or Warner Bros-Discovery/DC or Dynamite, or Fantagraphics, or Dark Horse, anyone else whose product is caught in this mess) not having filed that statement?

Roll For Combat did a video on this topic, you can track it down on YouTube. But my understanding is that that form is expensive to file and with limited profit margins already on these products, it's generally not filed. It's a catch 22. Fill the form out, be protected from a super rare scenario, but lose significant portion of profits. I don't know the math. Because diamond has been a long established company and there's trust, yes exactly... None of the companies have filled out that form. So, they're prob all going to lose the inventory.

 

[Reynard]

The Diamond court filing from a week or two back. Summarised in an article here on ENW for convenience.

What a strange world we have made for ourselves. I understand that there is a paperwork issues. What I am having trouble understanding is why such paperwork exists in the first place, especially if it is common for people not to file it.

 

[Von Ether]

Ah. The form having an expensive fee now makes much more sense. If true, that was a missing puzzle piece because I think a lot of people assumed the paperwork was just a form to sign and was free.

With the form being so expensive vs smaller amounts of stock, I am going to assume it's actually usually used for some other industry or for much larger orders and then was applied as one size fits all solution.

Hindsight being 20/20, someone at some time should have petitioned for a new form that fit the market. Of course Diamond was in the position to do that but seemed unmotivated to do or being apathic at best.

 

[Reynard]

Ah. The form having an expensive fee now makes much more sense. If true, that was a missing puzzle piece because I think a lot of people assumed the paperwork was just a form to sign and was free.

With the form being so expensive vs smaller amounts of stock, I am going to assume it's actually usually used for some other industry or for much larger orders and then was applied as one size fits all solution.

Hindsight being 20/20, someone at some time should have petitioned for a new form that fit the market. Of course Diamond was in the position to do that but seemed unmotivated to do or being apathic at best.

If I understand the situation, they were motivated not to by exactly this potential situation.

 

[Christian Hoffer]

Just a note here - I work in finance at my day job and the notion that a UCC-1 filing would significantly eat into profit margins is simply untrue. In Maryland (where I believe Diamond is located), it costs $75 maximum to file a UCC. Any business lawyer would charge no more than a billable hour to complete the paperwork. Also, anyone can file a UCC filing, so it's not limited by licensure.

I feel for anyone impacted by Diamond's bankruptcy and hope they get their stock back, but trying to say that filing this kind of paperwork was cost prohibitive is very misleading.

 

[Sacrosanct]

With all the usual warnings about getting your legal opinions from the internet, I'm hopeful that Green Ronin and the others can mitigate this in some way. Time will tell, I guess, but I'm rooting for them. I can't imagine how I'd feel were I in that position.

Oh, 100% here as well. I'm not even close to being an expert here, but I'm smart enough to know what I don't know-- that I don't know the processes and details of this situation hardly at all. I'm 100% hoping GR and others get some relief and my opinion is that Diamond is doing a pretty jerk move. I'm only saying that what I have seen and read out there from people who are more experts than I am (including more than one lawyer), it looks grim because of two main things:

1. The filing wasn't made
2. There is precedence. We have several examples where courts have already ruled in situations like this, and they've always favored Diamond (I don't have the examples off the top of my head, I'm only going by what I've heard lawyers state).

Of course, all this with the caveat that I'm not a lawyer and I assume each affected company will reach out to their own lawyers for advice.