On the morning of the 12th, the Seoul Central District Court's Civil Agreement Division 31 (Chief Judge Nam In-soo) ruled in favor of Min in the lawsuit filed by HYBE to confirm the termination of the shareholder agreement and the lawsuit filed by Min against HYBE for the payment of stock purchase funds.
The court ordered HYBE to pay Min approximately 25.5 billion KRW (around $260 million USD). As a result of this ruling, Min will be able to exercise her put option and receive the stock purchase funds from HYBE. The put option amount is calculated based on ADOR's average operating profit over the past two years and Min's shareholding ratio.
The court acknowledged that Min sought ways to independently control ADOR, as evidenced by submitted KakaoTalk conversations. However, it stated that this alone does not constitute a significant breach of contract. Min's exploration of independent control was contingent on HYBE's consent.
Regarding the KakaoTalk evidence submitted by HYBE, the court noted that Min's plans to raise funds externally for an IPO were based on the assumption of HYBE's approval. Without HYBE's consent, Min's independent control plans would have no effect.
The court also addressed the 'NewJeans copycat allegations' against I-LIT, stating that it was difficult to view them as a significant breach of duty. The claims were seen as opinions or value judgments rather than factual assertions.
Min's claim that HYBE encouraged 'chart manipulation' for NewJeans was deemed plausible. The court found evidence suggesting potential manipulation, leading HYBE to strengthen regulations to prevent recurrence.
The court criticized HYBE's internal practices, noting that inflating initial sales figures to confuse charts is not fair. HYBE claimed these actions were not company policy but the result of individual employee decisions, yet the court held them accountable.
The court concluded that the shareholder agreement could not be terminated based on abstract risks alone, as Min would suffer significant financial loss from losing the put option value.
The case began in July 2024 when HYBE notified Min of the contract termination, citing her attempts to privatize ADOR and resulting company losses. Min was removed from her CEO position in August and resigned as an internal director in November, exercising her put option.
HYBE argued that Min sought to independently control ADOR, citing KakaoTalk messages and internal documents as evidence of her attempts to terminate exclusive contracts with NewJeans members. They claimed this destroyed trust between major shareholders, justifying the contract termination and invalidating the put option.
Min countered that there was no breach of contract, accusing HYBE of distorting private conversations to fabricate scenarios of share seizure or management takeover. She claimed HYBE's actions were an attempt to undermine her label.
By Min Kyung Lee, TenAsia Reporter 2min_ror@tenasia.co.kr