[Sports Chosun Reporter Baek Ji-eun] Former ADOR CEO Min Hee-jin and the five members of NewJeans are preparing for a lawsuit against HYBE.
On the 15th, Min Hee-jin shared fan art with the phrase “NewJeans Never Die.” This garnered attention as it mirrored fan art shared by NewJeans member Hani last month as a gesture of support for Min Hee-jin, who was giving a lecture titled “The Creator Who Breaks the K-pop Formula, Min Hee-jin’s Freestyle” at the ‘2024 Hyundai Card Da Vinci Motel.’
This post drew even more interest because it was published ahead of the anticipated legal battle with HYBE.
Earlier this month, Min Hee-jin notified HYBE of her exercise of the put option. According to the shareholders’ agreement, upon exercising the put option, Min Hee-jin could receive an amount calculated by multiplying ADOR’s average operating income for the last two years by 13 and dividing by the total number of shares issued. Given that she exercised this option early this month, the years 2022 and 2023 are considered for the calculation. ADOR recorded a deficit of 4 billion won in 2022, when NewJeans debuted, but turned a profit with 33.5 billion won in operating income in 2023. Thus, the amount Min Hee-jin could receive is approximately 26 billion won.
However, exercising the put option does not guarantee immediate payment. HYBE notified the termination of the shareholders’ agreement in July, citing breaches of trust, and filed a lawsuit to confirm the agreement’s validity. The lawsuit’s outcome will determine whether Min Hee-jin can exercise her put option rights.
Additionally, NewJeans sent a certification of contents to their agency ADOR and CEO Kim Joo-young. On the 13th, NewJeans demanded the reinstatement of Min Hee-jin as CEO, serious action concerning an internal HYBE document that mentioned “abandoning New(Jeans) and starting anew,” and an official apology from a manager who told Hani to “ignore” certain issues. The members warned, “Correct these significant breaches of the exclusive contract within 14 days,” and warned that they would terminate their contract if their demands were not met.
If NewJeans notifies HYBE of terminating their exclusive contract, it is estimated that they would face a penalty exceeding 450 billion won. To avoid this penalty, they must prove HYBE’s fault and win the exclusive contract termination lawsuit. The critical question in these lawsuits is whether the trust between the parties is irreparably damaged and who is at fault. This has led to speculation that NewJeans’ demands, including a live broadcast request in September for Min Hee-jin’s reinstatement, may be a strategy to highlight alleged workplace bullying within HYBE.
Nevertheless, litigation does not guarantee a rosy outcome. Entertainment activities are typically halted during lawsuits, which could severely impact NewJeans, who have only been in the industry for two years. This legal battle could be detrimental if it drags on indefinitely.
ADOR stated on the 14th, “We have received and are reviewing the certification of contents. We are assessing the specific requests. We will do our utmost to resolve the issue wisely and continue to work with the artists.” There is keen interest in whether both parties can reach an amicable settlement.