Adidas shareholders filed a class-action lawsuit against the sportswear brand, accusing it of failing to warn investors about the antisemitism and "extreme behavior" exhibited by the rapper, Kanye West, before their partnership ended last year.
In the lawsuit, shareholders allege that Adidas "routinely ignored" his behavior as early as 2018. They claim that senior executives "ignored serious issues" affecting the Yeezy partnership, namely his antisemitic remarks and troubling public comments about slavery.
In a report from that year, Adidas was "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 lawsuit. During that time, Ye said that slavery was a "choice" in a TMZ interview.
The lawsuit said that Adidas was aware of his behavior and that the company "failed to take meaningful precautionary measures to limit negative financial exposure" if the partnership ended.
Adidas' Chief Financial Officer Harm Ohlmeyer and former CEO Kasper Rørsted are named as defendants.
The lawsuit doesn't name the rapper, who now goes by Ye. The suit covers anyone who bought an Adidas share from May 3, 2018 (when Ye made the slavery remark) until 2023.
Adidas responding to the lawsuit released a statement saying;
"We outright reject these unfounded claims and will take all necessary measures to vigorously defend ourselves against them,"
Adidas (ADDDF) ended its almost decade-long partnership with Eest in October 2022 after Ye wore a "White Lives Matter" T-shirt in public. Days later, Ye said "I can say antisemitic s*** and Adidas cannot drop me" during a podcast taping.
Adidas said that its partnership with Ye ended because it "does not tolerate antisemitism and any other sort of hate speech" and said his comments were "unacceptable, hateful and dangerous." It also said they violated the company's "values of diversity and inclusion, mutual respect and fairness."
The company said in February that it was expected to lose $1.3 billion in revenue this year because it's unable to sell the designer's Yeezy clothing and shoes.