$75M Yeezy Asset Freeze Overturned by Judge – Billboard
Written by patriciavallard on May 26, 2023
A federal judge on Friday (May 26) lifted a court order Adidas secretly won last year that froze $75 million in bank accounts held by Kanye West’s Yeezy brand — ruling that the sneaker giant ran afoul of procedural requirements and “deprived” Yeezy of a fair chance to challenge the freeze.
A week after the federal case against Yeezy was made public, Judge Valerie E. Caproni ruled that Adidas had failed to “confirm” the order against Yeezy with additional proceedings in court — a key requirement under the state law that allows such asset freezes.
“Petitioner launches a volley of unpersuasive arguments in an attempt to excuse its noncompliance with the plain language of the statute,” the judge wrote Friday. “Without a confirmation hearing Yeezy was deprived of an early opportunity to have the Court consider its substantive challenges to Petitioner’s arguments.”
The judge said the freeze on Yeezy’s bank accounts was not only lifted but that it had actually been “rendered null some six months ago when Adidas failed timely to move to confirm the order.”
A lawyer for Yeezy did not return requests for comment on Friday. A spokesman for Adidas declined to comment.
Adidas filed the case against Yeezy on Nov. 11, just weeks after the German sneaker company publicly terminated its long-standing relationship with the embattled rapper (sometimes known as Ye) in the wake of his antisemitic statements and other erratic behavior. Adidas did so because it believes that roughly $75 million of its money is currently in Yeezy’s bank accounts, and it wanted to ensure that those funds did not disappear while the two companies litigate their business divorce via private arbitration.
Judge Caproni quickly granted the company’s request for such an “attachment” order on a so-called ex parte basis — meaning the judge issued the freeze without giving Yeezy a chance to make counter-arguments. She did so because she ruled there was “a risk that Yeezy will remove or dissipate assets” if he was given advance notice of Adidas’s case.
The case and the ruling were filed “under seal” until last week when the judge issued an order making the records public.
In recent weeks, lawyers for Adidas and Yeezy sparred over whether the asset freeze should remain in place going forward. Attorneys for Adidas said that West had demonstrated a “pattern of volatile behavior” and was in “severe financial stress,” imperiling the company’s ability to recover the funds it believes it will win in the pending arbitration battle.
But lawyers for Yeezy said Adidas had “failed to show that it was ever entitled to such an order in the first place.” They strongly argued that Adidas had failed to live up to the requirements for such an order, specifically by not moving to “confirm” the order within five days.
In Friday’s ruling, Judge Caproni agreed, ruling that “Adidas’s failure to file a motion to confirm nullifies the attachment order.” The ruling means that Yeezy’s bank accounts will no longer be frozen by the previous order.
But it does not mean Yeezy or West are off the hook. The arbitration case filed by Adidas — the original reason it sought to freeze the money — remains pending, and Yeezy could still owe some or all of that money when the case is finally decided.
The judge also left open the door for Adidas “renewing its request” in future proceedings, meaning it can again seek to freeze Yeezy’s assets in some capacity. Only this time, it will likely come through proceedings that include detailed arguments from both sides.
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