A legal loophole in US bankruptcy proceedings has allowed the remnants of a major distributor to effectively seize ownership of stock belonging to over 100 publishers, including tabletop RPG publishers Paizo, Goodman Games and Green Ronin.
In essence, publishers who supply goods to a distributor on a ‘consignment’ basis retain ownership of those products until they are sold to a customer. The distributor is merely the middleman. However, in this case, the now-bankrupt Diamond Comic Distributors is arguing that because publishers did not file a specific piece of legal paperwork, their ownership rights are now void. This allows the bankrupt company to sell off all this stock, which it never actually paid for, to settle its own debts.
The situation has sent shockwaves through the comic book and tabletop roleplaying industries, with companies like Paizo, the publisher of the popular Pathfinder and Starfinder RPGs, now facing the loss of a significant amount of their physical inventory.
A Messy Bankruptcy Gets Messier
Diamond Comic Distributors, once the dominant force in comics distribution, filed for Chapter 11 bankruptcy in early 2025 after a difficult few years. While the company was recently acquired by Ad Populum (the parent company of well-known brands such as WizKids and NECA), a part of the original, pre-sale Diamond entity, now effectively controlled by its creditors, is making this move.
This “old” Diamond has filed a motion with the bankruptcy court to liquidate all the inventory it held on consignment. It argues that the 128 affected publishers failed to file a specific document, a UCC financing statement, which would have legally protected their interest in their stock. Because of this oversight, Diamond claims it can now take title to the inventory and sell it to pay down its estimated $41 million debt to lenders such as JP Morgan Chase.
For tabletop publishers, this is a significant blow. Stephen Glicker, the owner of Roll for Combat, which publishes the Battlezoo series of 5e-compatible books, told Rascal News he discovered his company’s books were “effectively held hostage” while on holiday.
Glicker noted that while the financial hit of around $50,000 worth of stock is something his company can withstand, the long-term damage is more worrying.
He explained, “The thing that upsets me most is that I have no control over my own product. My worst fear is seeing my product in discount bins, even though my company is doing fine.”
Paizo Halts Mass Market Releases
Paizo, one of the biggest names in the tabletop RPG scene, is also caught in the crossfire. The company had a large volume of its Pathfinder and Starfinder books held by Diamond.
In a statement, Paizo CEO Jim Butler expressed his dismay.
Their plans to take consignment inventory and give it away to pay off other debts is deeply disturbing. Paizo is working with attorneys on the matter, and I’ve spoken with several other publishers about the situation as well.”
As a direct result, Paizo has informed customers that its upcoming August and September releases will not be available through mass-market channels, such as Amazon or major bookstores. This includes the highly anticipated core rulebooks for Starfinder 2E and the Pathfinder Battlecry! supplement.
In a blog post on the company’s website, Butler advised customers on how best to support them and other affected publishers.
We expect Pathfinder and Starfinder products to remain unavailable through book trade channels for several months as Paizo determines our next steps and this matter works its way through the bankruptcy court. The best thing you can do to help Paizo and the 100+ publishers caught up in the Diamond bankruptcy is to order from them directly or go to your local game store and ask them to preorder upcoming releases so you’ll have them on launch day.”
The list of affected companies is extensive, including not just tabletop publishers like Goodman Games, Green Ronin Publishing, and Lionwing Publishing, but also comic book titans such as Marvel and DC Comics. The complex nature of large-scale distribution, a topic Geek Native has touched on before, often means that publishers become reliant on a single point of failure.
A hearing on the matter is scheduled for July 21st in the Baltimore Bankruptcy Court, where the affected companies will have a chance to object. For now, the industry is watching and waiting.
