$75 million Yeezy asset freeze overturned by judge – Billboard

On Friday, May 26, a federal judge lifted a court order that Adidas secretly won last year that froze $75 million in bank accounts held by Kanye West’s Yeezy brand – ruling that the sneaker giant had violated procedural requirements and “deprived” Yeezy of a fair chance to challenge the freeze.

A week after the federal case against Yeezy was made public, the judge Valerie E. Caproni ruled that Adidas had not “confirmed” the order against Yeezy with additional court proceedings – a key requirement under state law that allows such asset freezes.

“The petitioner launches a volley of flimsy arguments in an attempt to excuse his failure to adhere to the plain language of the law,” the judge wrote on Friday. “Without a confirmation hearing, Yeezy was deprived of an early opportunity to have the Court consider its substantive challenges to the Petitioner’s arguments.”

The judge said the freeze on Yeezy’s bank accounts had not only been lifted, but was actually “reversed about six months ago when Adidas failed to move in a timely manner to confirm the command”.

A lawyer for Yeezy did not return requests for comment on Friday. An Adidas spokesperson declined to comment.

Adidas filed suit against Yeezy on Nov. 11, just weeks after the German sneaker company publicly ended its longstanding relationship with the beleaguered rapper (sometimes known as Ye) following his anti-Semitic statements. and other erratic behavior. Adidas did this because it estimates about $75 million of its money is currently sitting in Yeezy’s bank accounts, and it wanted to make sure those funds didn’t disappear while the two companies plead for divorce. commercial by private arbitration.

Judge Caproni quickly granted the company’s request for such a “seizure” order on a so-called ex parte basis – meaning the judge issued the freeze without giving Yeezy the opportunity to present counter-arguments. . She did so because she judged there was “a risk that Yeezy might remove or dissipate assets” if it were given advance notice of Adidas’ case.

The case and decision 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 have argued over whether the asset freeze should remain in place going forward. Adidas lawyers say West has demonstrated a ‘volatile behavioral pattern’ and is in a ‘serious financial crisis’, jeopardizing the company’s ability to recoup the funds it believes it will win in the battle for ongoing arbitration.

But Yeezy’s lawyers said Adidas had “failed to prove that it was ever entitled to such an order in the first place”. They strongly argued that Adidas failed to meet the requirements of such an order, specifically by not “confirming” the order within five days.

In Friday’s ruling, Judge Caproni agreed, ruling that “Adidas’ failure to file a motion for confirmation voids the seizure order.” The decision means that Yeezy’s bank accounts will no longer be frozen by the previous order.

But that doesn’t mean Yeezy or West are off the hook. The arbitration case filed by Adidas — the original reason it sought to freeze the money — remains outstanding, and Yeezy may still owe some or all of that money when the case is finally decided.

The judge also left the door open for Adidas to “renew its claim” in future proceedings, meaning it may again seek to freeze Yeezy’s assets to some degree. Only this time it will likely go through a process that will include detailed arguments from both sides.

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