More Details Surrounding the Zadeh Kicks Dissolution Have Been Revealed
News on this topic was first covered on May 27, 2022.
Update July 19, 2022: According to the latest documents filed by the Zadeh Kicks case appointed receiver, David P. Stapleton, the government has taken ownership of a number of owner Michael Malekzadeh's personal assets, as per Complex. This includes 1100 pairs of sneakers, plus accessories and cash roughly adding up to $6.1 million. It was also found that Zadeh Kicks was in possession of around 60,000 sneakers, reportedly acquired from other resellers in the industry.
Given all of this, according to the report, Stapleton is not looking to resume business operations. An excerpt reads: 'The receiver (Stapleton) does not plan to resume fulfillment of shoes in the ordinary course and instead is focusing his efforts on a sale strategy to maximize recovery from the inventory for the benefit of all creditors.'
The world of flipping aftermarket kicks is a shadowy – and occasionally devious – space. Money and products change hands in immense quantities, and although there's plenty of cash to be made there's just as much to be lost when things go wrong. It's safe to say that things are going very, very wrong for customers of Zadeh Kicks, a long-running resell business established in 2013 that recently (and abruptly) ceased its operations, filing for a dissolution in Oregon court and leaving behind seven figures worth of unfulfilled orders.,
Per a report from Complex, Zadeh Kicks founder Michael Malekzadeh filed a motion to voluntarily dissolve his company on May 19 in the circuit court of Oregon's Lane County. He claimed that the company's rapid growth between January 2020 and May 2022 left him unable to keep up with the demands of running it due to 'inadequate internal systems and processes,' and that he hasn't been taking new orders since April 29. Preliminary estimates of Zadeh Kicks' liabilities and assets show the former outweighing the latter by millions of dollars, rendering it unable to pay back the debts it owes.
The Zadeh Kicks webstore is currently offline – and Malekzadeh has deleted many of his personal and business Instagram accounts as well – but its homepage recently displayed a message (shown above) that indicated a court-appointed receiver named David P. Stapleton had taken over the handling of its remaining assets. Since then, the FBI has gotten involved in a criminal investigation of the business as well (seen below)! Several customers who had tens or hundreds of thousands of dollars tied up with Zadeh Kicks have taken to social media to speak on their varying degrees of success in getting their money back through chargebacks and PayPal claims, while Stapleton has begun setting up the framework for customers to enter a claims process.
So how did it all work before things went bad? Zadeh Kicks was founded in 2013 and offered a popular preorder service that would let buyers order hyped sneakers well before their release date – often right after they were announced – at a price that, although above retail, was often much less than their expected aftermarket value. Though this made it popular with your average joe sneakerhead who didn't want to go through the trials and tribulations of a release day, it was even more popular with resellers who had the funds to order early sneakers in bulk and flip them for a huge profit when they did release. Besides the prices, Zadeh Kicks' main appeal lay in the authenticity of its products – there are both NikeTalk threads and subreddits full of stories of Zadeh Kicks' shoes clearing authentication at other physical and digital aftermarket platforms.
Customers would usually receive their orders between six and 10 weeks after the release date, but if Zadeh Kicks was unable to fulfil their order they would be given store credit or a heavily-taxed refund, per the company's customer service policy. It's worth noting that this gift card policy has thrown another wrench in the company's dissolution: some customers, like the individual above, are now stuck with gift cards for thousands of dollars that may now be worthless.
This is an ever-evolving case, and will likely have plenty more twists and turns before it's resolved – so keep it locked here for further updates!