2023-07-25 10:42:35
In April this year, Adidas shareholders went to court, filing a lawsuit once morest the renowned sportswear giant, citing its failure to enforce injunctive relief in connection with the problematic behavior of Kanye West, aka Ye. Now it is West who is at the center of the lawsuit for a controversy related to the misappropriation of funds.
After the explosive situation last October, where Ye openly criticized Adidas executives and made offensive comments with anti-Semitic overtones, the artist has largely stayed out of the spotlight. The scandal was widely discussed on social media and led the brand to end its partnership with Yeezy. Adidas has sued Ye, its former partner, alleging that a significant part of the annual marketing budget of $100 million was mismanaged, diverting $75 million.
According to Adidas, $50 million worth of marketing fees were transferred to a Yeezy bank account located in Wyoming, which was Ye’s residence at the time, while another $25 million was deposited into Yeezy’s account at JPMorgan Chase in New York. These funds were intended for marketing purposes, but the sportswear giant alleges they were instead transferred to a separate general account, where they were mixed with other Yeezy funds, a clear violation of their agreement, Bloomberg television reported.
The dispute between Adidas and Kanye West is currently undergoing arbitration, with mismanagement of marketing funds being just one of the issues requiring resolution. The contractual agreement between Adidas and Ye is documented in a sweeping 53-page license and sponsorship agreement, signed in May 2016, along with a series of amendments, letters of agreement and payment confirmations that were later incorporated into the deal, Bloomberg said. The contract also contains confidentiality clauses intended to safeguard the details of the deal and the Yeezy business. One of those clauses requires Ye’s company to return any unused or misused marketing funds received from Adidas the previous year, as stipulated by the shoe maker.
As the legal battle rages on, both Adidas and Kanye West are grappling with the complexities of this intricate contractual agreement, seeking a solution on multiple fronts. The outcome of this case will undoubtedly have major implications for both parties and might reshape future celebrity business collaborations.
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This article was originally published on FashionUnited.COM, and later translated from English to Spanish and edited by Alicia Reyes Sarmiento.
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