Adidas has been sued in the United States by a group of shareholders who believe the German firm could have mitigated losses caused by the costly failure of its partnership with Kanye West, AFP reports.

The class-action lawsuit was filed in U.S. District Court in Oregon, where the group’s U.S. headquarters are located.

In October last year, Adidas was forced to end its collaboration with the American rapper Kanye West, now known as Ye, with whom he created the successful Yeezy sneakers.

The split followed a series of missteps by the star, including anti-Semitic comments.

The plaintiffs say Adidas was aware of the potential damage Ye’s behavior could cause the company, and point to problematic statements dating back to 2018 in which the rapper suggested slavery was a “choice.”

The lawsuit, which represents an unspecified number of shareholders who bought Adidas stock between May 3, 2018 and February 21, 2023, also claims Adidas failed to take steps to mitigate financial losses if the partnership with Ye s- ended.

The complaint cites a Wall Street Journal article from last November that said the group’s executives, including CEO Kasper Rorsted, who was fired at the end of 2022, knew as early as 2018 of the risks associated with the rapper’s behavior.

In a response to the suit sent to AFP on Tuesday, Adidas said it “categorically rejects these baseless allegations”. The group will take “all necessary measures to vigorously defend”.

Adidas has warned that due to the termination of cooperation with Kanye West, its operating result this year will be zero at best.

The company could even record an operating loss of 700 million euros, depending on the fate of the millions of Yeezy sneakers still in stock, the fate of which is not yet decided.