The Yeezy Legal War Is Officially Over — And Adidas Just Won Big

Adidas has just won one of its highest-profile legal cases, as a US appeals court dismissed a lawsuit filed by shareholders who alleged that the company concealed Ye's misconduct.

The ruling marks the official conclusion of the court record regarding the failure of the Yeezy business alliance, which was highly profitable.

HLSA-ILA Funds, the union representing US maritime workers, filed the lawsuit, claiming that Adidas defrauded investors by failing to disclose what it termed its long-standing knowledge of Ye and his inappropriate behaviour. The lawsuit dates back to circa 2018, when the partnership suddenly dissolved in 2022 as a result of Ye's antisemitic comments, which caused widespread controversy.

Investors claimed that, since Adidas failed to inform them of the full cost—controversies associated with Ye—they have lost a considerable amount of money as the brand terminated and the stock dropped.

No Fraud Found in Court

On 3 December 2025, a three-judge panel of the United States Court of Appeals at the Ninth Circuit decided in favour of Adidas, rejecting the appeal. The judges discovered that the company had not lied to its investors. Instead, it had already issued public disclosures warning of the potential adverse spillover effects of collaborating with persons in the entertainment industry—a generic but valid warning that investors ought to have realised.

These broad risk warnings, in the court's opinion, implied no material omission. The decision stated that there was no firm indication that Adidas acted with malice towards shareholders.

According to the panel: 'A reasonable investor would know that a partnership with a celebrity partner like Ye would come with inherent risks relating to improper behaviour.'

A Long, Profitable and Spectacular End to a Partnership

The Yeezy partnership was now among the most successful celebrity-brand partnerships in modern times. The collaboration is reported to have generated some of Adidas's most significant windfall sales, amounting to about EUR1.5 billion (EUR1.31 billion) by 2021.

However, the affair went down the drain. Ye made multiple antisemitic comments, which caused significant reputational damage and financial hardship after Adidas cut ties with Ye in October 2022.

The company then sold off the remaining Yeezy stock, promising to share a share of the revenue with anti-discrimination organisations.

What the Victory Means, and What is still at Stake

To Adidas, the court ruling provides legal relief and reduces the risk of additional shareholder lawsuits arising from Ye's misconduct. Currently, the 2025 decision affirms the 2024 ruling of a federal judge who initially declined to hear the case.

However, the business is still felt. The company has acknowledged that its North American sales decreased by approximately 2 per cent in 2024, primarily due to the decline in Yeezy sales.

More than just immediate losses, the decision highlights a broader truth: celebrity endorsements, particularly those that are hot-tempered, entail reputational and financial risk. To many investors, the court has sent a loud and clear message that success can be unstable.

The End of One Story, A Lesson to the Industry

With this decision, Adidas can now close the chapter on one of the most controversial partnerships. This ruling exonerates the company's management and assures major companies that invest in celebrity-led brands.

But it also shows the stakes in these collaborations: great dividends, but also great exposure. With fashion, sportswear, and luxe brands still courting well-known people to promote them as status symbols, the Yeezy saga is a warning to them.

In the meantime, Adidas has prevailed in the court battle. The real test is whether it can regain long-term consumer trust and restore the brand image in a post-Yeezy world.