MUSIC
Former ADOR CEO Min Hee-jin's Legal Battle with HYBE Over Put Option Intensifies
On the 12th, the Seoul Central District Court's Civil Agreement Division 31 will hold the first hearing for the lawsuit filed by Min against HYBE, demanding payment related to the exercise of a put option. The court will also concurrently review HYBE's lawsuit seeking confirmation of the termination of the shareholder agreement against Min and another party.
Min Hee-jin notified HYBE of her intention to exercise the put option after stepping down from her position as an internal director at ADOR in November 2024. A put option allows a shareholder to demand the purchase of their shares at a predetermined price under certain conditions.
The estimated amount Min could receive is approximately 26 billion KRW (around $22 million USD). According to the shareholder agreement between Min and HYBE, Min can exercise the put option based on a calculation involving 13 times the average operating profit of ADOR for the years 2022 and 2023, divided by the total number of issued shares.
ADOR recorded an operating loss of 4 billion KRW in 2022, the year NewJeans debuted, but achieved an operating profit of 33.5 billion KRW in 2023. Min holds 573,160 shares of ADOR, representing an 18% stake. However, under the shareholder agreement, she can only exercise the option for 75% of her shares, equating to approximately a 13.5% stake.
HYBE, however, announced in July 2024 that it had notified Min of the termination of the shareholder agreement due to a breach of contract. If the agreement is indeed terminated as HYBE claims, the put option rights would be nullified. Min's side argues that the breach was on HYBE's part and that the put option was exercised while the contract was still valid.
HYBE countered by stating, "Both parties claim the legal effect of termination, but the legal grounds differ based on who is at fault. Our argument is supported by precedent, and the defendant has not yet submitted a detailed rebuttal. We will present a specific proof plan once a rebuttal is provided."
The court has decided to conduct a combined trial for both the put option lawsuit and the shareholder agreement termination case, stating, "We will proceed with concurrent hearings."
