In the ongoing legal battle between Adidas and Kanye West’s Yeezy brand, Billboard Magazine reports that a Manhattan federal judge has denied Adidas’ emergency order to re-freeze $75 million held by Yeezy accounts. The judge’s rejection comes as Adidas’ raised baseless concerns that the disputed money might disappear, lifting a previous freeze on Yeezy’s accounts.
While this ruling is a loss for Adidas, it only denies the emergency motion, leaving room for Adidas to potentially secure an asset freeze on Yeezy through a conventional order in the near future as early as later this week. Both parties are expected to file briefs on the matter by Thursday.
Adidas, which had a profitable sneaker partnership with Kanye West for nearly a decade, ended their relationship last fall due to West’s controversial statements and erratic behavior. Following the split, Adidas secretly filed a case in federal court to freeze $75 million in Yeezy assets, claiming that West’s company is contractually obligated to return the funds. The company initiated private arbitration proceedings to recover the money and sought a court order to prevent any movement of the funds during the legal proceedings.
Court records reveal that Judge Valerie E. Caproni initially granted the asset freeze in November, but lifted it last week after Yeezy’s attorneys challenged the order, citing procedural issues and denying Yeezy a fair chance to defend itself. Shortly after the lift, Adidas filed an emergency request to re-freeze the assets, arguing that Yeezy possesses $75 million that it has no legal right to and expressing concerns about potential insolvency.
However, Judge Caproni denied Adidas’ motion for a temporary restraining order, stating that Adidas had not met the legal requirements for such an order. The judge mentioned that Adidas had presented only speculative information about Yeezy’s risk of insolvency. She suggested that while Adidas may succeed in its arbitration case against Yeezy, it did not provide sufficient grounds for the emergency order.
The ongoing legal dispute between Adidas and Yeezy has contributed to a messy breakup for Adidas, resulting in a loss of $655 million in sales for the last quarter of 2022 and a quarterly net loss of 513 million euros ($540 million). To mitigate the impact, Adidas announced plans to sell $1.3 billion worth of unsold Yeezy products and donate the proceeds to organizations affected by Kanye West’s controversial statements.
