A federal judge has dismissed a class action lawsuit against Adidas over its partnership with Kanye West, alleging securities fraud related to the controversial artist’s alleged inappropriate behavior.
The lawsuit, filed by the HRSA-ILA Foundation, alleges Adidas concealed West’s misconduct from 2013 to 2018 and its concerns about working with him.
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The court dismissed these allegations, stating that there was insufficient evidence to support the claim that the misleading statements had affected investors.
“Certainly, it is troubling that Ye allegedly engaged in such conduct while working for Adidas,” Judge Karin J. Immergut said, according to AllHipHop.
“This Court does not condone what Ye is alleged to have done. But the question before this Court is not whether to censure Ye or hold Adidas morally responsible for Ye’s conduct,” the judge added. “This Court faces a precise legal question: whether [HRSA-ILA Funds] Are the facts sufficiently proven to show that Adidas misled investors and therefore committed federal securities fraud? According to the record now before this Court, the answer is no.”
The judge cited a 2020 Business Partner Risk Disclosure, which investors can access and which outlines the potential consequences of unethical behavior by business partners. The document outlines the strategies Adidas has adopted to manage these risks, including contractual provisions that allow it to suspend or terminate partnerships when necessary.
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In 2021, the Adidas-Yeezy partnership was a huge success, generating more than $1.7 billion in annual sales and boosting Adidas’ revenue significantly. But in 2022, West made headlines for expressing anti-Semitic views on social media, leading to backlash and the suspension of his account.
Despite these developments, the award-winning musician continued to make controversial statements in interviews, leading Adidas to decide to end the partnership.
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Adidas is stuck with $1.3 billion worth of unsold Yeezy shoes after cutting ties with Kanye West, and doesn’t know what to do with them 👀👟 pic.twitter.com/8TPh9N62rh
— Daily Loud (@DailyLoud) May 9, 2023
The decision has had significant financial consequences, with a reported revenue loss of $1.3 billion by 2023 as a result.
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The incident comes after the 47-year-old rapper appeared at a Donald Trump rally in Beverly Hills, California over the weekend.
Arriving at the event in a sleek Tesla Cybertruck with his wife, Bianca Censori, West appeared in a widely circulated video.
Excited fans surrounded the couple’s car, enthusiastically showing their support with “Make America Great Again” flags.
While West has kept his 2024 voting preferences private, the Yeezy creator has expressed support for the former president in the past.
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