Rockport lawsuit claims Adidas, Reebok are jeopardizing asset sale

By Caroline Salls

Pittsburgh, July 11 – The Rockport Co., LLC filed a lawsuit Tuesday against Adidas AG and Reebok International Ltd. in light of a management agreement liability dispute that the company said could jeopardize its asset sale, according to a filing with the U.S. Bankruptcy Court for the District of Delaware.

The company said in its complaint that former Rockport owners Adidas and Reebok entered into a management agreement under which they operated the Rockport businesses in some markets on its behalf.

“This dispute is about which entities are liable to Adidas and Reebok under the management agreement,” the lawsuit said.

Although the entities in question did not even exist at the time the management agreement was executed, Rockport said Adidas and Reebok argued in a recently filed asset sale objection that the Rockport entities are “jointly and severally” liable for $54 million allegedly owed under the management agreement.

As a result of this claim, Rockport said the purchaser of its assets has issued a prospective notice of a breach of the asset purchase agreement.

The company said it is therefore asking the bankruptcy court to rule that the management agreement imposes liability for the amounts owed only on Rockport and not on the affiliated entities.

Rockport, a West Newton, Mass.-based footwear company, filed bankruptcy on May 14. The Chapter 11 case number is 18-11145.

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