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Diamond’s debtors and the Ad Hoc Committee of publisher-consignors have jointly sought approval of a comprehensive settlement over consigned inventory held at former Diamond warehouses, according to Bleeding Cool. The request seeks to resolve the parties’ major disputes over that stock; it is a proposed settlement, not a court-approved outcome.
Approval would clear a central residual conflict in the case: ownership, disposition, and proceeds from publishers’ inventory. Resolving it would reduce litigation over the remaining stock and allow the estate and consignors to move toward final inventory reconciliation rather than continue a dispute that has persisted through the restructuring and liquidation process.
The court approved Diamond Comic Distributors’ move out of Chapter 11 and into Chapter 7, with conversion effective at 11:59 p.m. on the fifth business day after entry of the order, December 26, 2025. The order also approved the eighth DIP stipulation with JPMorgan Chase Bank, extending the DIP maturity to December 29, 2025 and setting a $6.5 million maximum DIP facility to fund the handoff, final case expenses, claims-agent work, and limited administrative costs through conversion Conversion and Eighth DIP Stipulation Order.
The debtor framed conversion as the practical endpoint after selling substantially all assets for lower-than-expected proceeds, winding down primary operations, and leaving a Chapter 7 trustee to pursue remaining litigation, claims, causes of action, and disputed consignment inventory issues. JPMorgan was unwilling to continue funding Chapter 11 administration, and unresolved consignor disputes remained despite mediation efforts Conversion Motion. The order stays contested matters and adversary proceedings until February 16, 2026, requires turnover of books and claims data to the Chapter 7 trustee, and sets final Chapter 11 fee applications due 30 days after conversion, shifting the case from debtor-led wind-down to trustee-controlled liquidation.
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