While Adidas is ending the federal court case, a messy legal fight over its split with the embattled rapper is just beginning.
Kanye West attends the 2020 Vanity Fair Oscar party hosted by Radhika Jones at Wallis Annenberg Center for the Performing Arts on February 09, 2020 in Beverly Hills, California.After a whirlwind week of litigation, Adidas has abruptly dropped a federal court case aimed at freezing $75 million held by Kanye West’s Yeezy brand, saying it will instead pursue the money solely through private arbitration.
In a legal filing Tuesday evening, attorneys for Adidas and Yeezy said they had reached an agreement that would see the sneaker giant voluntarily dismiss the case. It came just hours after a federal judgeBut the dismissal is hardly the end of the dispute. Adidas and Yeezy will continue battle it out in a private arbitration case, in which Adidas will likely argue that that West’s “offensive conduct” caused the breakdown of their long-standing partnership.
It’s been a messy breakup for Adidas. The split contributed to a loss of $655 million in sales for the last three months of 2022, helping drive the company to a quarterly net loss of $540 million. Last month, CEO Bjorn Gulden said the company would begin selling its $1.3 billion worth of unsold Yeezys, but would “donate money to the organizations that help us and were harmed by what Ye said.”show that it demanded Yeezy return $75 million that had allegedly been deposited in its accounts.
Court records show that Judge Valerie E. Caproni quickly granted the asset freeze in November, doing so not only in secret, but also on an “ex parte” basis — meaning without giving West or Yeezy a chance to make counter-arguments. Adidas argued, and the judge agreed, that there was a serious risk that Yeezy would have moved the money if given advanced notice.
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