After Adidas secretly won a court order last year, that froze $75 million in Yeezy bank accounts held by Kanye West, a federal judge lifted the order; and now the German sportswear brand is dropping their case against the rapper and designer, with plans to privately settle their issues.
Adidas Drops Case Against Kanye West After Freezing His Yeezy Accounts Worth $75M
It is reported that on Tuesday (May 30), Adidas submitted an emergency request to re-freeze $75 million belonging to Ye after Manhattan Federal Judge Valerie E. Caproni lifted a court order on Friday (May 26). The order was secretly won last year by Adidas and allowed them to shut Ye out of his Yeezy accounts.
At the time of the secret win, Judge Caproni had granted the company’s wish to freeze the Yeezy funds on an ex-parte basis, which meant that Adidas got what they wanted, while Ye and his team could not appeal the decision.
However, the order was lifted last week when Ye’s team challenged to unfreeze the accounts and Federal Judge Caproni obliged, declining Adidas’ request to keep the funds frozen.
During Tuesday’s emergency hearing in Manhattan, New York, Adidas told the courts that they were concerned with how Ye would use the $75 million in the Yeezy accounts. They claimed that if the funds were not frozen, they would suffer “irreparable harm.”
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After Tuesday’s ruling, it was reported that Ye would now maintain control of a large portion of his Yeezy funds. Per Morgan Stanley, when Adidas severed ties with Ye (over his anti-semitic rants), at the time, Ye accounted for 8% of Adidas revenue and 40% of its profit.
However, as of today (Wednesday, May 31), it is now reported that Adidas has dropped their lawsuit against Ye, but the saga is not over. In November 2022, the company first named Ye in a lawsuit. Again, the litigation began after the company ended their partnership with Ye over his comments about the Jewish community.
Following the ruling on Tuesday (to unfreeze the Yeezy accounts), later that evening, attorneys for Adidas and Yeezy revealed that they had come to an agreement, which invovled the sneaker giant voluntarily dropping their case and all parties moving forward to privately arbitrate.
It is further reported that during the private arbitration, Adidas will most likely continue to argue that ye’s “offensive conduct” is to blame for the tear in their long-standing partnership, which left Adidas on its face when they dropped Ye.
We previously reported how following their split, Adidas loss millions, specifically, they lost $655 million in sales in the last three months of 2022. This then resulted in a quarterly net loss of $540 million.
Plus, last month, CEO Bjorn Gulden then reported that the company had several thousand unsold Yeezy pairs and would be selling its $1.3 billion worth of shoes, and would “donate money to the organizations that help us and were harmed by what Ye said.”
RELATED: Adidas Announces Company Will Donate Parts Of Its Unsold Yeezy Stock To Charity
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