{"id":2298,"date":"2024-08-19T20:36:31","date_gmt":"2024-08-19T20:36:31","guid":{"rendered":"https:\/\/usatrustedlawyers.com\/blog\/adidas-beats-class-action-lawsuit-by-investors-over-kanye-west-deal\/"},"modified":"2024-08-19T20:36:31","modified_gmt":"2024-08-19T20:36:31","slug":"adidas-beats-class-action-lawsuit-by-investors-over-kanye-west-deal","status":"publish","type":"post","link":"https:\/\/usatrustedlawyers.com\/blog\/adidas-beats-class-action-lawsuit-by-investors-over-kanye-west-deal\/","title":{"rendered":"Adidas Beats Class-Action Lawsuit by Investors Over Kanye West Deal"},"content":{"rendered":"\n
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\n\tAdidas AG has won a court order dismissing a class-action lawsuit that claims the German sneaker giant violated securities laws by failing to warn its shareholders about Ye\u2019s offensive behavior.<\/p>\n

\n\tThe case claimed that Adidas knew about serious problems with Ye (formerly Kanye West) as far back as 2018 but failed to disclose them, leaving investors facing losses when the company finally ended the partnership<\/a> in 2022 over Ye\u2019s antisemitic tirades and erratic behavior.<\/p>\n

\n\tIn a ruling Friday (Aug. 16), Judge Karin Immergut<\/strong> said she did not condone Ye\u2019s conduct \u201cerratic, inappropriate, and antisemitic\u201d behavior and said it was \u201ctroubling\u201d that it had happened at Adidas, but that it did not rise to the level of securities fraud.<\/p>\n

\n\t\u201cThe question before this court is not whether to admonish Ye or hold Adidas morally accountable for Ye\u2019s conduct,\u201d Immergut wrote. \u201cRather, this Court is faced with a precise legal question: has Plaintiff sufficiently pleaded facts showing that Adidas misled investors and thereby committed federal securities fraud? On the current record before this Court, the answer is no.\u201d<\/p>\n

\n\tAdidas ran a lucrative collaboration with Ye and his Yeezy apparel brand for nearly a decade. But the party ended in 2022, when the sneaker company (and many others) cut ties with the embattled rapper amid a wave of offensive statements he made about Jewish people. In an October 2022 statement announcing the split, Adidas said the rapper\u2019s statements were \u201cunacceptable, hateful and dangerous.\u201d<\/p>\n

\n\tIt\u2019s been a messy breakup for Adidas. The split contributed to a loss of $655 million in sales for the last three months of 2022 and left Adidas holding $1.3 billion worth of unsold Yeezys and facing tricky questions about how to dispose of them responsibly. Adidas also battled Ye in court over millions in company funds and disclosed that it was litigating other aspects of the divorce in private arbitration.<\/p>\n

\n\tIn May 2023, a group of investors took Adidas to court over the breakup, arguing that Adidas executives had been aware for years of the potential harm that could come from the Ye partnership but had failed to publicly share such concerns with shareholders, as required by U.S. securities law.<\/p>\n

\n\tIn particular, the lawsuit cited a November 2022 Wall Street Journal<\/em> article reporting that Adidas executives feared for years that the Yeezy relationship could \u201cblow up at any moment.\u201d The article reported that West had made antisemitic comments in front of Adidas staffers, including suggesting that an album be named after Adolf Hitler. The Journal <\/em>story also highlighted a 2018 presentation to then-CEO Kasper R\u00f8rsted<\/strong> that detailed the risks of the arrangement and contemplated cutting ties with him.<\/p>\n

\n\tBut in Friday\u2019s ruling, Judge Immergut sided with arguments from Adidas that the company\u2019s disclosure statements had not misled investors about the risk posed by Ye. In one passage, she reminded the plaintiffs that Ye had shown signs of erratic behavior well before the split with Adidas \u2014 quoting statements in which he said that \u201cracism is a dated concept\u201d and that slavery was a \u201cchoice.\u201d<\/p>\n

\n\t\u201cThis court would be remiss not to note the very public nature of Ye\u2019s behavior before Fall 2022,\u201d the judge wrote. \u201cAfter all, courts are not required to exhibit a naivet\u00e9 from which ordinary citizens are free.\u201d<\/p>\n

\n\tThe judge gave the investors one final chance to refile an updated version of their case against Adidas, but she cast doubt on whether they could overcome the problems she had identified in her ruling.<\/p>\n

\n\tAttorneys for both sides did not immediately return a request for comment.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Adidas AG has won a court order dismissing a class-action lawsuit that claims the German sneaker giant violated securities laws by failing to warn its shareholders about Ye\u2019s […]<\/p>\n","protected":false},"author":1,"featured_media":2299,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[3032,1091,3033,379,2068,1627,303,1628],"class_list":["post-2298","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-lawyers","tag-adidas","tag-beats","tag-classaction","tag-deal","tag-investors","tag-kanye","tag-lawsuit","tag-west"],"_links":{"self":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/2298","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/comments?post=2298"}],"version-history":[{"count":0,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/2298\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/media\/2299"}],"wp:attachment":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/media?parent=2298"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/categories?post=2298"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/tags?post=2298"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}