Adidas is in hot water with investors who claim the company knew about the risks of partnering with Ye, a.k.a. the one and only Kanye West, long before it cut ties with the rapper.
According to the lawsuit filed in federal court in Oregon on Friday, Adidas was aware of Ye’s problematic behavior but failed to take precautionary measures to limit financial losses if the partnership were to end. It looks like they should’ve invested in some Ye-proof armor!
The German sportswear giant ended its partnership with Ye in October after the rapper’s antisemitic remarks on social media and in interviews. The company called Ye’s comments “unacceptable, hateful and dangerous” at the time. But investors are like, “Yeah, we told you so.”
Apparently, Adidas executives discussed the risks of continuing their collaboration with Ye as far back as 2018, according to a report by The Wall Street Journal. But they didn’t take any action, which left investors feeling a little salty.
The investors claim that the 2018 annual report “ignored serious issues” with the partnership and the potential risk to shareholders. Adidas was only “generally alluding” to the risks, rather than actually considering ending the partnership. Oops.
To make matters worse, the company also failed to disclose that Ye made antisemitic remarks in front of Adidas staff. Yikes, that’s not a good look, Ye.
Adidas is not taking the lawsuit lying down, though. Claudia Lange, vice president of external communication at Adidas, said in an email Sunday that they “outright reject these unfounded claims” and will “take all necessary measures to vigorously defend ourselves against them.”
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The lawsuit, which seeks to represent investors who bought Adidas securities between May 3, 2018, and Feb. 21, doesn’t name Ye as a defendant. It looks like Ye dodged a bullet… for now.