Is Kanye back with Adidas? Development in $75 million lawsuit case explained

German sportswear brand Adidas has unexpectedly withdrawn a federal court case against Kanye West's Yeezy, which was targeted at freezing the $75 million held by the latter. As per Billboard, the brand will proceed to recover the money through private arbitration.

Attorneys for Adidas and Yeezy announced in a court filing on May 30 evening that they had struck an arrangement that would see the footwear giant voluntarily drop the lawsuit. It happened only hours after a federal court denied Adidas' request for an emergency order to re-freeze the $75 million retained by Yeezy.

After the shoe brand announced in October 2022 that it has ended ties with Kanye West, newly discovered court documents reveal that Adidas asked Yeezy to give back $75 million that had been put into its accounts, but the latter denied it. Then the German sportswear brand secretly filed a lawsuit and sought an "attachment" order to freeze the money.

In November 2022, Judge Valerie E. Caproni granted the appeal to freeze those assets on an ex-parte basis, which did not give Kanye West or his brand to defend themselves or make counter-arguments.

However, last week, when Yeezy's lawyers opposed the freezing order, the court ultimately overturned its previous ruling, finding that Adidas had broken the rules for such asset attachments and "deprived" Yeezy of a fair opportunity to respond.

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Kanye West is not back with Adidas, but the latter will continue to Yeezy inventory

On May 19, 2023, Adidas announced that it will release some of its Yeezy inventory, which had remained unsold after the brand cut its ties with Kanye West in October 2022 following his tirade of anti-Semitism remarks.

In a press release, Adidas CEO Bjørn Gulden said that the first batch of Yeezy will be sold on May 31 via the company's website and its app. A "significant amount" of the money collected will be donated to organizations like the Philonise and Keeta Floyd Institute for Social Change and the Anti-Defamation League (ADL) fighting racism, discrimination, and anti-Semitism.

The statement by the CEO said:

“After careful consideration, we have decided to begin releasing some of the remaining Adidas Yeezy products. Selling and donating was the preferred option among all organizations and stakeholders we spoke to. We believe this is the best solution as it respects the created designs and produced shoes, it works for our people, resolves an inventory problem, and will have a positive impact in our communities.”

Adidas has refrained from disclosing the exact percentage of the sale that will be donated. However, the company has clarified that the sale of these shoes will not immediately affect its financial forecast for 2023. May 31's sales will not put all the remaining Yeezy inventory for buying purposes. Additionally, the brand said it is planning on making other releases, but the timing hasn't been decided yet.

Adidas lost hundreds of millions of dollars by severing ties with Kanye West, which contributed to a loss of $655 million in revenues for the last three months of 2022 and a quarterly net loss of 513 million euros. The company also revealed last month that it has lost $441 million in sales at the start of 2023.