Adidas Hit with Investor Lawsuit Over Collapse of Partnership with Ye

Adidas severed ties with Ye, formerly Kanye West, in October after a series of hate speeches he made.

Adidas AG is being sued by investors who claim the German sports giant knew the risks of working with Ye long before his anti-Semitic comments became public.

Adidas severed ties with Ye, formerly known as Kanye West, in October following a string of hateful rhetoric he made. In a lawsuit filed Friday in Oregon federal court, investors allege that as early as 2018, senior executives at the company discussed the risks to Adidas of continuing its relationship with the rapper.

In its 2018 annual report, released in March of the following year, Adidas ignored severe problems with working with Ye. The risk to shareholders, the indictment says, is the “generally alluding” risk “rather than the suggestion that the company actually considered terminating the partnership because of West’s personal conduct.”

Reports in subsequent years failed to disclose that West had made anti-Semitic remarks about Adidas employees, at one point suggesting he might name an album after Adolf Hitler, according to the indictment. As the relationship with Leaf eroded, so did Adidas’ stock until the deal was terminated, filings show.

After the deal closed, Adidas received Yeezy gear from suppliers who still make Yeezys. The company is considering selling Yeezy products and donating the profits to charity to offset the financial losses from the breakup of the alliance with Yeez. The last batch of Yeezy products had a retail value of €1.2 billion ($1.3 billion), some of which only recently arrived in Adidas warehouses.

The lawsuit, which seeks to represent investors who bought Adidas securities between May 3 and February 21, 2018, also names ousted former CEO Casper Rorsted as a defendant.

The case is HRSA-ILA Funds v. Adidas, 23-cv-629, US District Court for the District of Oregon.

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