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Mājas Entertainment Investor Litigation Against Adidas Over Kanye West’s Erratic Behavior Officially Dismissed with...

Investor Litigation Against Adidas Over Kanye West’s Erratic Behavior Officially Dismissed with Prejudice

Investor Litigation Against Adidas Over Kanye West’s Erratic Behavior Officially Dismissed with Prejudice

Photo Credit: Ye by Pieter-Jannick Dijkstra / CC by 2.0

The class action lawsuit against Adidas over the company’s partnership with Kanye West, despite his erratic behavior, has been dismissed with prejudice.

The investor class action litigation against Adidas over their alleged prior knowledge of Kanye West’s “erratic behavior” has been officially dismissed with prejudice, meaning it cannot be refiled. The lawsuit was initially dismissed back in August, citing insufficient evidence.

Filed by the HRSA-ILA Funds, the lawsuit asserted that Adidas failed to reveal to investors Kanye’s inappropriate behavior between 2013 and 2018 and their own internal apprehensions about working with him. But the court found insufficient evidence to show misleading statements that may have affected investors.

“Certainly, that [Kanye] allegedly engaged in such behavior while working with Adidas is troubling,” said Judge Karin J. Immergut at the time. “This Court does not condone what the Plaintiff allegedly did. But the question before this Court is not whether to admonish [Kanye] or hold Adidas accountable for his conduct.”

“Has [HRSA-ILA Funds] sufficiently pleaded facts showing that Adidas misled investors and thereby committed federal securities fraud? On the current record before this Court, the answer is no,” concluded Judge Immergut. “Based on the Court’s Opinion and Order granting Defendants Adidas AG’s […] Motions to Dismiss, it is ordered and adjudged that this action is dismissed with prejudice.”

Kanye West, who now goes by Ye, was bringing in over a billion dollars with his Adidas-Yeezy partnership by 2021, which accounted for 8% of Adidas’ revenue and over 40% of its profits. But beginning in 2013, investors alleged that the company was aware of the “troubling potential” of its partnership with the rapper.

Ye’s erratic behavior escalated with his antisemitic rants on social media in 2022, which led to Adidas cutting him loose despite the financial trepidation in doing so. Last year, the company’s revenue had dropped by $1.3 billion over the decision to sever ties with West.

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