The court has ruled in favor of former ADOR CEO Min Hee-jin in her high-stakes legal battle with HYBE over a put option dispute worth approximately 26 billion KRW.
On February 12, the 31st Civil Division of the Seoul Central District Court dismissed HYBE’s lawsuit seeking confirmation of termination of the shareholder agreement with Min and other executives. The court also upheld Min’s counterclaim, ordering HYBE to pay approximately 25.5 billion KRW (255억 원) in stock purchase proceeds under the exercised put option.
Key Issue: Was There Grounds for Contract Termination?
The central issue was whether Min’s alleged attempt to pursue ADOR’s independence and restructure governance constituted valid grounds for terminating the shareholder agreement.
The court acknowledged that Min had reviewed potential independence plans, citing KakaoTalk messages and investor contact circumstances. Conversations reportedly referenced scenarios such as exercising the put option, attracting external investment, and share acquisition strategies.
However, the court concluded that these discussions did not rise to the level of a “material breach” sufficient to justify contract termination.
The judges stated that termination is permissible only when a violation is so serious that the contract’s fundamental purpose can no longer be achieved. Based on the submitted evidence, they found it difficult to determine that substantial damage had occurred or that the contractual relationship had irreparably broken down.
Put Option Deemed Valid
The court also rejected HYBE’s argument that trust between the parties had collapsed to a degree warranting termination. It clarified that mere deterioration of trust does not automatically satisfy contractual or statutory termination standards, which require a serious violation.
As the shareholder agreement remains legally valid, Min’s right to exercise the put option — contingent upon meeting a specified tenure period — was recognized as legitimate.
The dispute escalated after HYBE notified Min of contract termination, alleging management control attempts, investor outreach, and discussions regarding NewJeans’ potential departure as breaches of agreement.
Min had maintained that the contract remained valid and that any independence review was part of normal business consideration. The court agreed that while independence scenarios were examined, there was insufficient proof of corporate damage or destruction of the agreement’s purpose.
Additional allegations raised during the dispute — including claims related to NewJeans’ departure, copying suspicions, and album distribution practices — were also deemed insufficient to establish material harm to the company.
The court noted that ADOR’s business performance continued during the dispute period, including album releases and tours, and found no substantial impairment in Min’s execution of her duties as CEO.
Meanwhile, the same civil division is currently reviewing a separate damages lawsuit filed by ADOR against Min and former NewJeans member Danielle, seeking approximately 43.09 billion KRW (430억 9,000만 원) over alleged responsibility for NewJeans’ departure and delayed return.
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