Skechers Sueing Adidas

Footwear company Skechers sued Adidas in federal court Thursday, claiming its competitor created false advertising and unfair competition by funneling hundreds of thousands of dollars in secret payments to high school and college basketball players and their families to wear its products.


Skechers, based in Manhattan Beach, California, is seeking recovery of Adidas' "ill-gotten profits, damages for lost sales and diminished brand value and increased advertising and marketing costs, and an injunction preventing adidas from making further illegal, undisclosed endorsement payments to amateur basketball players," according to the lawsuit.

Adidas executive Jim Gatto and employee Merl Code were among 10 men arrested by FBI agents in late September, following a two-year investigation into bribes and other corruption in college basketball. Among other charges, the government alleges Gatto, Code and Christian Dawkins, a runner for former NBA agent Andy Miller, conspired to make improper payments to ensure that high school players signed with Adidas-sponsored colleges and then inked endorsement deals with the shoe company once they turned pro.