We're rounding up here the developments in the Diamond Comic Distributors bankruptcy case late last week.

Filings from two groups of creditors addressed the dispute roiling the Diamond bankruptcy case over whether Diamond has the right to seize and sell consignment inventory in its warehouse.

The Ad Hoc Committee of Consigners filed a motion to stay Diamond’s motion to seize the consignment inventory.  The Ad Hoc Committee is composed of two game publishers and nine comic publishers (see "Group Battling Diamond") that are objecting to Diamond's plans, along with a second group of 12 companies and numerous individual consignment vendors (see "Numerous Objections").

The Ad Hoc Committee's motion was based on the grounds that there are disputes over who owns the inventory, which require service of a complaint on each of the consignors, discovery of facts, motions or trial that leads to a court ruling with the opportunity for appeals, and an amended Diamond motion that lists the inventory to be sold.

Separately, the Official Committee of Unsecured Creditors, which represents the interests of all unsecured creditors, including both consignment and non-consignment vendors, filed a statement urging an expedited resolution of the dispute, noting that "…prompt settlement of the issues… is in the best interest of all stakeholders," because of the costs of the dispute. 

"The Committee has concluded that protracted litigation of the issues raised in the Motion… will divert estate resources during a pivotal time in these cases," the Committee said in its statement, urging the court to take specific steps to speed the dispute along toward a settlement.

In other activity last week, Sparkle Pop LLC, the Ad Populum company that acquired assets of Diamond Comic Distributors and Diamond Select, has amended its complaint against Alliance Entertainment, adding a new count to the complaint and tweaking others.

Alliance Entertainment is the company that was originally awarded both Diamond Comic Distributors and Alliance Game Distributors as the result of an auction of the company's assets.  Alliance Entertainment terminated the asset purchase agreement and filed suit against Diamond and related parties after discovering that Wizards of the Coast was not an ongoing supplier of Alliance Game Distributors (see "Alliance Entertainment Sues Diamond, Again").

The Sparkle Pop action was filed as a result of Diamond and Ad Populum’s discovery that Alliance Entertainment hired seven Diamond employees and appeared to be taking steps to go into competition with Diamond's new owners (see "Alliance Entertainment Hires Seven from Diamond").

The amended complaint filed last week adds a fifth count, alleging that Alliance violated the NDA it signed as it was evaluating a purchase of Diamond, which included a provision restricting Alliance soliciting or hiring Diamond employees.

Meanwhile, the clock is ticking, fees are mounting, and amounts available to pay creditors other than the bank are shrinking because of the disputes surrounding this troubled bankruptcy.