Judge Overturns $75 Million Estate Foreclosure – Billboard

A federal judge on Friday (May 26) lifted a court order that Adidas won in secret last year to freeze $75 million in bank accounts held by Kanye West’s Yeezy brand — ruling that the sneaker giant violated due process requirements and denied Yeezy an opportunity to challenge the freeze.

A week after the federal indictment against Yeezy was announced, the judge Valerie E. Caproni Adidas ruled that the injunction against Yeezy could not be “verified” by further court proceedings — a key requirement in state law that allows such assets to be frozen.

“The petitioner raised unpersuasive arguments to disprove the plain language of the statute,” the judge said Friday. “Without a confirmation hearing, Yeezy was denied an early opportunity for the Court to address substantive challenges to petitioner’s argument.”

The judge said not only that the ban on Yeezy’s bank accounts had been lifted, but that “six months ago, Adidas failed to act in time to confirm the order, which was dismissed.”

Yeezy’s attorney did not return requests for comment Friday. An Adidas spokesman declined to comment.

Adidas filed the lawsuit on Nov. 11, weeks after the German sneaker company officially ended its longtime relationship with the rapper (sometimes known as Ye), who has come under fire for his anti-Semitic statements and other misogynistic behavior. Adidas did so because it believed that about $75 million of the money was currently in Yeezy’s bank accounts, and wanted to keep those funds from disappearing while the two companies disputed their business terms in private arbitration.

Judge Caproni quickly granted the company’s request for an “attachment.” Yeezy said it did so because it was “concerned that Yeezy’s assets could be liquidated or dispersed” if he was notified of the Adidas lawsuit in advance.

The charges and verdict were allegedly “sealed up” until last week, when the judge made the case public.

In recent weeks, attorneys for Adidas and Yeezy have questioned whether the foreclosure could go forward. Adidas’ lawyers said West had exhibited “erratic behavior” and was “under severe financial stress,” which hurt his ability to recoup the money the company believed it would win in the pending arbitration battle.

But Yeezy’s lawyers said Adidas “failed to demonstrate that it was entitled to such an injunction from the outset.” Adidas strongly argued against such an order, especially because it failed to “confirm” the order within five days.

In Friday’s ruling, Judge Caproni concurred, ruling that “Adidas’ failure to state a claim warrants a reversal of the attachment order.” The ruling means Yeezy’s bank accounts will not be blocked by the previous order.

But that doesn’t mean Yeezy or West are off the hook. The arbitration case filed by Adidas – the main reason he wanted to freeze the money – is pending, and Yeezy could take some or all of that money when the case is finally decided.

The judge left the door open for Adidas to “renew its claim” in future proceedings, meaning it could seek to freeze some of Yeezy’s assets. Only then can it be brought about by proceedings involving detailed arguments from both sides.


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