HYBE has appealed a first-instance court ruling that mandates payment of 25.5 billion won to former ADOR CEO Min Hee-jin for exercising a put option on company shares. The entertainment giant also filed a request to suspend enforcement of the decision pending the appellate outcome.
Appeal Filed in Seoul Court
Court records show HYBE submitted the appeal to the Seoul Central District Court’s Civil Agreement 31st Division, which handles re-examination cases. The company seeks to block execution of the lower court’s order until a higher court rules on the matter.
Origins of the Put Option Dispute
Financial regulators announced on the 12th that HYBE proposed collateralizing 25.5 billion won to Min Hee-jin to cover the put option execution. Similar offers extended to former executives at other labels totaled 1.7 billion won and 1.4 billion won.
Regulators noted HYBE previously recovered a significant stake using Min as collateral. The put option price reflects full price fluctuations through the prior cycle.
Min Hee-jin and HYBE reached agreements in April 2024 covering business succession and the handover of NewJeans. HYBE proposed recovering the stake in August 2024 via its semi-annual report, but Min indicated plans to proceed with the put option transaction in November.
Financial Scale of the Deal
The put option amount equates to 13 times ADOR’s average operating profit over 2022-2023, covering 75% of Min Hee-jin’s share value. ADOR recorded 40 billion won in revenue in 2022 but surged to 335 billion won in 2023. Following HYBE’s acquisition audit in April 2024, the exposed stake stood at 573,160 shares, or 18% of the company.
NewJeans Members’ Separate Concerns
Apart from Min Hee-jin’s put option lawsuit, NewJeans members expressed alarm over ADOR’s plans for a total share buyback. In October, the Seoul Central District Court’s 41st Civil Division, presided by Chief Judge Jung Hoi-il, ruled in favor of ADOR in a suit filed by the members seeking confirmation of the buyback contract’s validity.
