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16 Footwear Insight Business Report Quarterly ~ Q2 July 8 2024 footwearinsight.com Under Armour is moving to settle a seven-year-old class action shareholder suit without admitting any fault or wrongdoing. e Baltimore-based company last month agreed to pay $434 million to end a Feb. 2017 filed case that charged it with making "false and misleading statements" about its financial health and took issue with accounting practices. Under Armour, in the middle of revamping its marketing and product approach under CEO Kevin Plank, intends to pay for the litigation settlement out of its cash/cash equivalents and end its FY in March 2025 with about $500 million in cash/cash equivalents and no outstanding borrowings under its $1.1 billion credit revolver. Nike was slapped with a class action shareholder suit on June 20 that alleges CEO John Donahue and CFO Matthew Friend made "materially false and/ or misleading statements" about its aggressive Direct-To-Consumer strategy called the "Consumer Direct Accelerate" policy when it was publicly disclosed in June 2020. e case, filed in Oregon District Court by the Pembroke Pines City Pension Fund for firefighters and police officers, alleges the defendants misrepresented and/or failed to disclose the CDA policy was unable to generate sustainable revenue growth from it or use its competitive advantage to protect itself. All the while, according to the complaint, Nike's CDA disengaged many of its wholesale and retail partners. Besides damages and attorneys' fees, the plaintiff is seeking class certification for anyone who purchased Nike Class B common stock between March 19, 2021, and March 21, 2024. As of the close of trading on June 26, Nike shares were down more than 11 percent since opening the year at $105.76. In another legal case, involving Nike and Puma, the German company scored a victory in a trademark dispute when the General Court of the European Union ruled last month that a trademark the capitalized the word "Footware" could not be owned by the Swoosh parent. Nike had obtained the footware trademark from the high court in the United Kingdom in 2021 and could file an appeal to the latest ruling with the European Court of Justice. It should be noted that San Antonio Shoe Inc. (SAS) won a similar trademark battle with Nike over the "footware" trademark in February. Two former marketing executives for Adidas China departed the company last month following the emergence of a June 7 anonymous letter that was sent to the company's German headquarters. e correspondence alleged compliance violations in China, including embezzlement and financial kickbacks from market advertising agencies that was said to include real estate. Adidas, the second-largest athletic brand in mainland China behind Nike, is reportedly investigating the corruption allegations with external advisors. n UNDER REVIEW LEGAL BRIEFS MAJOR LITIGATION NEWS FROM MAJOR ATHLETIC BRANDS. Over recent weeks, there have been significant legal developments involving three major athletic brands. A brief synopsis of each case is below.