Dive Brief:
- Adidas and Ye reached an agreement to drop a request for a temporary restraining order to re-freeze $75 million held by the Yeezy brand, according to court documents viewed by Fashion Dive.
- Adidas initially filed a petition in November 2022, weeks after the German brand and Ye, also known as Kanye West, parted ways following his rant of anti-semetic remarks. The request, originally granted by the United States District Court for the Southern District of New York, asked for a freeze on all money Ye and his companies held associated with the Yeezy brand. The hold was lifted last week after Ye’s attorneys challenged the order. Adidas then filed a renewed request, seeking the same relief from the previous filing.
- Though the request for the TRO is dismissed, Adidas said in the court documents the company would seek resolution through pending arbitration.
Dive Insight:
Attorneys for Adidas argued in its initial request for a TRO that Yeezy currently possesses the $75 million “to which it has no legal right,” claiming the money was provided to Yeezy in the year prior to the termination of their agreement. The attorneys claim Adidas’ termination letter to Ye demanded the money back, but Ye didn’t respond.
In addition to asking to freeze the money, Adidas also submitted a request for Yeezy to provide access to books and records related to the funds, and requested an order to return funds it requested to withdraw from the account. Yeezy did so on May 17, according to the documents.
In November 2020, when Adidas initially filed the request, JP Morgan Chase Bank stated it intended to close the accounts where the money resides, according to the documents.
None of the attorneys involved responded to Fashion Dive’s request for comment ahead of press time.
The Yeezy brand and the split with Ye have proven tumultuous for Adidas.
A surplus of Yeezy stock coupled with other excess inventory challenges represented a drag of around $440 million on the year-over-year comparison in its latest earnings report.
Since the company’s last earnings report in early May, it announced it would start selling some of the Yeezy stock and donate a “significant amount” of the proceeds to organizations that combat discrimination, hate, racism and antisemitism.
Adidas and the company’s top leadership are also being sued in a class action lawsuit by investors, claiming the company knew of the risks associated with the Ye partnership before it was widely known, causing decline in the market value of its shares.
