Adidas has decided to drop its $75 million lawsuit against Kanye West’s Yeezy brand, opting instead to pursue the matter through private arbitration, according to an article by Billboard.
The sudden decision comes after a federal judge denied Adidas’ emergency order to freeze the $75 million held by Yeezy.
While the lawsuit has been dropped, the legal battle between Adidas and Yeezy will continue in the form of a private arbitration case. In this arbitration, Adidas is expected to argue that West’s “offensive conduct” led to the breakdown of their longstanding partnership.
Adidas, which had a successful sneaker collaboration with West for nearly a decade, severed ties with the rapper last year following his controversial statements and erratic behavior.
The split had a significant impact on Adidas, contributing to a loss of $655 million in sales in the last quarter of 2022 and resulting in a quarterly net loss of $540 million. To address the fallout, Adidas announced plans to sell its unsold Yeezys worth $1.3 billion and donate the proceeds to organizations affected by West’s remarks.
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The legal dispute between Adidas and Yeezy began when Adidas demanded the return of $75 million allegedly deposited in Yeezy’s accounts. Yeezy refused, prompting Adidas to file a federal court case seeking an asset freeze on the funds.
Although the court granted the freeze initially, it was eventually lifted after Yeezy’s attorneys challenged the order, arguing that Adidas had violated procedural requirements. Adidas attempted to have the freeze reinstated but failed to meet the legal requirements for a new temporary restraining order.
While the pending arbitration case’s duration and specific issues are unknown, Adidas has claimed that West’s “racist, antisemitic, and other offensive public statements and conduct” caused significant damage to its brand.
The company stated that it has multiple causes of action against Yeezy resulting from the termination of their contract due to West’s behavior. The arbitration will address these broader causes of action and the disputed issues between the parties.
As the legal battle shifts to arbitration, the outcome and potential implications for both Adidas and Yeezy remain uncertain.
