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.

 

[John R Davis]

Is this a silly question?

How are they liquifying ( stealing!) the assets. How are they turning 500 books in a warehouse from company XYZ into cash dollars? Who will they sell too?

Ta

 

[Jd Smith1]

Is this a silly question?

How are they liquifying ( stealing!) the assets. How are they turning 500 books in a warehouse from company XYZ into cash dollars? Who will they sell too?

Ta

Well, they were a distributor, so it is possible that they have one or more contacts who purchase books.

Otherwise, there are companies who deal in these sort of situations. The former is preferable, but needs must when the devil drives.

And no, its not stealing. That part is in fact silly.

 

[MGibster]

This deals with contract law. Contract law is, by it's very nature, an obscure and murky area of law. Extremely intelligent attorneys are paid many hundreds of thousands of dollars a year to deal with these matters, and that requires a great deal of legal training and practice. None of us here (as far as I can tell, though I may be wrong) are contract lawyers.

I was just thinking how out of depth I am on this. As someone who doesn't run a business, someone who is involved in an industry that doesn't deal with tangible goods that are sold, I am completely unaware of the intricacies of relationships and contracts between a producer and a vendor who serves as a distributor. To further compound my ignorance, I am not particularly adroit when it comes to navigating bankruptcies. While this situation sucks and it seems unfair, I just don't know enough to definitively state someone is doing something unethical.

Its just business. There no such thing as a non-predatory business; that's an oxymoron. You're applying drama to the routine.

Typically a predatory business, or predatory business practices, include fraud, unfair contract terms, collusion, and other behaviors that may be illegal and/or unethical. You can run a business without doing anything illegal or unethical.

 

[Jd Smith1]

Typically a predatory business, or predatory business practices, include fraud, unfair contract terms, collusion, and other behaviors that may be illegal and/or unethical. You can run a business without doing anything illegal or unethical.

Sure. But for something to be fraud, unfair contract terms, collusion, etc, you have to be found guilty or liable, at least in the USA, where this is occurring.

Neither the court nor any participant is even alleging criminal or fraudulent behavior, much less having obtained a conviction.

So, once again, this is just a bankruptcy. Happens all the time. No malignant intent, no cover operation for a alien take-over of Mankind, just bad decisions coupled with turbulent times equaling financial ruin.

 

[chuckdee]

Is this a silly question?

How are they liquifying ( stealing!) the assets. How are they turning 500 books in a warehouse from company XYZ into cash dollars? Who will they sell too?

Ta

Liquidators who then sell in bulk to companies that specialize in getting rid of these types of lots, i.e. Ollie's. They won't get anywhere near the retail value, but they just want money.

 

[JLowder]

You aren't quoting what you're replying to, and replying in rapid fashion, making it very hard to follow the thread, at least to me..

When I look at the post from me you quoted, I am seeing the post I quoted and replied to. Not sure why you are not.

 

[JLowder]

So, once again, this is just a bankruptcy. Happens all the time. No malignant intent, no cover operation for a alien take-over of Mankind, just bad decisions coupled with turbulent times equaling financial ruin.

There were plenty of decisions made by Diamond along the way where they could have spared their business "partners" the damage they are causing now. That was either malice or incompetence on their part. There is no real third option.

 

[Jd Smith1]

There were plenty of decisions made by Diamond along the way where they could have spared their business "partners" the damage they are causing now. That was either malice or incompetence on their part. There is no real third option.

In the USA, malice exists only after a verdict is reached in a court of law. No one in the court is even suggesting that course, so once again, you are in the realm of fantasy.

As to incompetence, the fact they are in bankruptcy is an arguement, but that's not a crime, nor unique to Diamond.

 

[gban007]

You aren't quoting what you're replying to, and replying in rapid fashion, making it very hard to follow the thread, at least to me..

Is likely someone being on ignore impacting you - either you are ignoring a poster or they are ignoring you, you should be able to tell by looking at post numbers. If the post number is jumping by 2 each time then you aren't seeing one sides posts.

 

[JLowder]

How are they turning 500 books in a warehouse from company XYZ into cash dollars? Who will they sell too?

There are book remainder houses that pay pennies on the dollar for stock being blown out, typically because a publisher closes or the publisher's license with an author or licensor ends and they can no longer sell a title. This stock ends up at Half-Priced Books or on the remainder/sale tables at the front of Barnes & Noble or at a discount/remainder chain or online reseller.

It works like this: If the book's cover price is $1, the remainder house pays, say, 5 cents for it. The remainder house then sells the book to a retailer for, say, 25 cents, and the retailer then puts it on sale for 50 cents. That's a bargain for the buyer, as it is 50% off full cover. For the publisher, getting only 5 cents is selling at a loss, but they are at least getting something rather than simply pulping/destroying the book, which they have to pay out to do.

If that happens to this stock, it will compound the damage to the publishers. The stock channeled through the remainder processes will likely end up being sold at some fraction of the cover price. This will undercut any full-price sales the publisher might make of stock they had at other warehouses or new copies of the works they print to replace the ones lost here. And, of course, they will receive nothing from the remaindered sales, either.