NewJeans' Legal Battle: A Turning Point for Min Hee-jin's New Agency?

≪Choi Ji-ye's Epilogue≫
Choi Ji-ye, a TENASIA journalist, provides sharp and objective insights into the entertainment industry's events. Discover the 'missing piece' through the journalist's precise analysis.

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Min Hee-jin, former CEO of ADOR, has launched a new entertainment agency, ooak, sparking mixed reactions within the industry.

The group NewJeans is set to receive a first-instance verdict on their ongoing lawsuit to confirm the validity of their exclusive contract with ADOR, a subsidiary of HYBE, on the 30th. The outcome of this ruling is expected to influence the direction of Min Hee-jin's new company, ooak.

If the court rules in favor of NewJeans, deeming the termination of their contract with ADOR justified, NewJeans will be legally independent.

In this scenario, Min Hee-jin's new company, ooak, is likely to become the foundation for NewJeans' resumed activities. Industry insiders speculate that Min established the corporation in anticipation of the verdict, allowing for immediate action. Should NewJeans win, they could swiftly resume activities such as producing new music, planning content, and rebranding to make up for over a year of inactivity.

However, there are variables. The ongoing put option lawsuit and the interpretation of the non-compete clause between Min Hee-jin and HYBE remain unresolved. If the non-compete clause is legally upheld, even if NewJeans wins and moves to ooak, HYBE might pursue additional legal action.

Conversely, if the court finds the exclusive contract between NewJeans and ADOR still valid, NewJeans must adhere to the contract until July 2029. Given the over one-year hiatus, ADOR might seek to extend the contract period.

In this case, the possibility of NewJeans moving to ooak is effectively blocked. Attempting to transfer could be seen as a breach of contract and third-party interference, potentially leading to damages in the hundreds of millions. Legal experts predict that considering NewJeans' commercial value and remaining contract duration, the penalty could be astronomical.

Despite Min Hee-jin's establishment of a new company, direct activities with NewJeans may be challenging for at least five years. Industry analysis suggests that while Min is betting on NewJeans' victory, a loss could render ooak an empty shell.

With the non-compete clause and ongoing disputes with HYBE unresolved, HYBE might challenge the very establishment of ooak. Min maintains that "the shareholder agreement was lawfully terminated, so the non-compete obligation does not exist." However, this issue could become a new point of contention depending on the court's decision.

The first-instance ruling scheduled for the 30th is expected to be a turning point. If NewJeans wins, the likelihood of them moving to Min Hee-jin's ooak is high. Conversely, if they lose, NewJeans will remain legally with ADOR, and Min Hee-jin's ooak may need to pivot towards discovering new artists.

The outcome of this lawsuit is anticipated to bring significant changes to the legal and industrial landscape of the K-pop market, drawing attention from both inside and outside the industry.

Choi Ji-ye, TENASIA journalist wisdomart@tenasia.co.kr