Adidas AG was sued by investors who claim the German sports giant knew about risks of its partnership with the rapper known as Ye long before his anti-Semitic comments were made public.
(Bloomberg) — Adidas AG was sued by investors who claim the German sports giant knew about risks of its partnership with the rapper known as Ye long before his anti-Semitic comments were made public.
Adidas in October cut ties with Ye, formerly known as Kanye West, after he unleashed a string of hateful rhetoric. Investors claim in a lawsuit, filed Friday in federal court in Oregon, that as early as 2018 senior executives at the company discussed the risks Adidas faced continuing its relationship with the rapper.
In a 2018 annual report, released in March of the following year, Adidas ignored serious issues of partnering with Ye – and the risk to shareholders – by “generally alluding” to the risks “rather than stating that the company had actually considered ending the partnership as a result of West’s personal behavior,” according to the complaint.
Reports in subsequent years failed to disclose that West made anti-Semetic comments to Adidas staff, at one point suggesting that he might name an album after Adolf Hitler, according to the complaint. As the relationship with Ye eroded, so did Adidas shares, until the deal was terminated, according to the filing.
Adidas didn’t immediately respond to a request for comment.
After ending the deal, Adidas kept accepting shipments of Yeezy gear from suppliers still producing it. The company is considering selling Yeezy products and donating the profit to charity, as it tries to offset the financial hit from the collapse of the alliance with Ye. The last of the Yeezy products, some of which only recently arrived at Adidas warehouses, have a retail value of €1.2 billion ($1.3 billion).
The lawsuit, which seeks to representing investors who bought Adidas securities between May 3, 2018 and Feb. 21, also names ousted former CEO Kasper Rorsted as a defendant.
The case is HRSA-ILA Funds v. Adidas, 23-cv-629, US District Court for the District of Oregon.
Adidas Shakes Up Management, Sidesteps Yeezy Gear Question
(Updates with details of the suit in third paragraph.)
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