Adidas AG lost a court bid to freeze $75 million it paid to Ye, the rapper and designer formerly known as Kanye West, to market Yeezy shoes.
At a Tuesday hearing, US District Judge Valerie Caproni in Manhattan rejected Adidas’s arguments that it needed a temporary restraining order to ensure that the funds remain available as its dispute with Ye over the blow-up of their partnership due to his antisemitic statements continues in arbitration.
The dispute between West and Adidas stems from the termination of their partnership in 2022.
West had accused Adidas of breach of contract, alleging that the company had failed to pay him royalties and had interfered with his creative control over the Yeezy brand.
Adidas denied the allegations, and countersued, alleging that West had breached the contract by making disparaging remarks about the company.
“Adidas had not shown that it was likely to succeed on its breach of contract claim.”
Judge Valerie Caproni said In her ruling
She noted that West had already been paid $1.5 billion under the terms of the contract, and that Adidas had not provided any evidence that West had breached any of the terms of the contract.
The judge also said that the freeze would cause irreparable harm to Yeezy. She noted that Yeezy is a “fast-growing, profitable company” that relies on its cash flow to operate.
The freeze would prevent Yeezy from paying its employees, suppliers, and other creditors, and could force the company to file for bankruptcy.
The ruling Is a major victory for West, and it could have a significant impact on the future of the Yeezy brand. With the freeze lifted, West will be able to access the $75 million that is essential to the company’s operations.
Now, Kanye West has been in a legal war with the likes of Adidas. Overall, this all started when Kanye started going after them on social media. He made it crystal clear that he wanted out of his deal.
However, he was a huge cash cow for Adidas, and they understandably didn’t want to let him go. That’s when Kanye turned to anti-Semitism and forced Adidas’ hand. Subsequently, they let him go understanding the kind of financial implications it would have.
Kanye West‘s Yeezy sneakers will once again be sold by adidas after the company ended its partnership with him – but there’s a specific plan in place.
On May 11, adidas CEO Bjorn Gulden revealed the company created a short-term plan to salvage what can be salvaged by selling the remaining inventory.
“What we are trying to do now over time is sell parts of this inventory and donate money to the organizations that are helping us and that were also hurt by Kanye’s statements,” Gulden told investors at the time
On Wednesday (May 31), the plan went into action with adidas’ official site advertising the sale of “some of the remaining inventory,” noting that a “portion from the sale of these items will be donated in support of the fight against discrimination, hate, racism, and antisemitism.” The products include existing designs and designs initiated in 2022 for sale in 2023.