Publishers who were consignment suppliers of Diamond Comic Distributors are uniting to block Diamond's seizure and sale of consignment inventory (see "Diamond Seeks to Take Consignment Inventory"), according to a notice sent to ICv2.  Three publishers were named as part of the effort so far: Fantagraphics Books, Drawn and Quarterly, and Dynamite Entertainment.

The notice said:

"Notice to all publishers and vendors who distributed products through Diamond.  Diamond or its successor entities have publicly moved to sell inventory currently in its warehouses without publishers' consent.  Several publishers are pooling their resources together to challenge these proposed sales procedures for this inventory.  If you represent a company with inventory currently warehoused with Diamond or its successor entities and would like to learn more, please reach out to the following publishers who are helping to put together our group of vendors:

Eric Reynolds at: reynolds@fantagraphics.com
Peggy Burns at: peggy@drawnandquarterly.com
Nick Barrucci at: nick.barrucci@dynamite.com"

The seizure and sale of the suppliers' consignment inventory will have substantial financial impacts on the 182 suppliers affected by the move, as well as potentially tying up and/or devaluing inventory that retailers need for their customers.  Fantagraphics Books' Eric Reynolds laid out the situation in a recent interview with ICv2, in which he described the situation "…as DEFCON 2, if not 1" for the direct market (see "Reynolds on ‘Hostage Inventory’ and the Diamond Mess").

There is at least one path for the publishers to prevail, and that’s to show that Diamond "…is generally known by his creditors to be substantially engaged in selling the goods of others." Using a survey of creditors, this strategy has been used successfully to get a bankruptcy court to order the return of the consignment inventory to the suppliers (see "Consignors Can Win in Bankruptsy Cases"). Whatever legal strategy the publishers pursue, this group is going to pool resources to pay for it.

Objections to the sale of consignment inventory must be filed with the court by July 16, this Wednesday.