A legal battle is unfolding over the potential earnings of the K-pop group NewJeans, with ADOR seeking substantial damages based on projected revenue had the group continued its activities under their management without dispute. The Seoul Central District Court’s Civil Settlement Division 31 held a hearing on May 23rd concerning a damages lawsuit filed by ADOR against former member Danielle Marsh, Marsh’s mother, and Min Hee-jin, the former CEO of ADOR and current CEO of THEBLACKLABEL. The lawsuit is reportedly for approximately 33 billion KRW (around $24 million USD).
ADOR’s Claim: Projecting Lost Revenue
At the heart of the proceedings is ADOR’s attempt to calculate the financial losses incurred due to the disruption of NewJeans’ activities. ADOR is requesting damages calculated on the projected sales and profits that NewJeans would have generated had they operated normally from November 2024, when their exclusive contract termination was announced, until November 2025, when their return to ADOR was slated.
The agency argues that NewJeans’ success was built upon the foundation laid by ADOR and its production capabilities. They contend that even if Min Hee-jin’s directorial input was significant, it was integrated into the established framework of ADOR and NewJeans. Therefore, they believe it’s unnecessary to isolate and subtract her specific contributions when calculating damages, as her influence was already embedded within the group’s operational success under ADOR.
Furthermore, ADOR addressed the defense’s argument regarding the alleged ‘breach of trust’ between ADOR and NewJeans. ADOR stated that this claim has already been legally settled, with the court ruling against such a breach. Consequently, they assert that this point should not be considered in the current damages calculation.
Defense’s Counterarguments: Uncertainty and External Factors
The defense, representing Danielle Marsh and her mother, has raised several objections to ADOR’s damage projections. They argue that any calculation of NewJeans’ revenue should be based on the period when Min Hee-jin was actively involved as a producer. They pointed out that the difficulty in finding a new producer after Min Hee-jin’s departure highlights the challenges inherent in the production process.
The defense emphasized that the entertainment industry’s success relies not only on an artist’s popularity but also on crucial elements like production, directing, and agency support. They contend that the current situation, with key personnel who worked with Min Hee-jin having left the company, is significantly different from the past and must be reflected in any financial assessment.
Additionally, the defense questioned the predictability of NewJeans’ popularity in the coming years. They argued that it is difficult to ascertain the extent of the members’ individual appeal and Min Hee-jin’s personal capabilities, making future revenue projections highly speculative. They also raised concerns about holding Danielle solely responsible for the consequences of collective actions by the five NewJeans members, deeming it unfair.
Court Proceedings and Future Schedule
The court has directed ADOR to submit a preliminary damage assessment report by the next hearing, scheduled for September 10th. A subsequent hearing is planned for October 22nd.
Background of the Dispute
The current legal dispute stems from events beginning in November 2024. ADOR announced that NewJeans’ exclusive contract with the agency had been terminated, and the members chose to pursue independent activities. However, a preliminary injunction filed by ADOR was ruled in their favor by the court, affirming the validity of the exclusive contracts.
Following this ruling, members Haerin, Hyein, and Hanni were set to return to ADOR for activities spanning November to December 2025. Minji is reportedly in positive discussions with ADOR regarding future contract terms. ADOR, however, placed the responsibility for the contract termination notice on Danielle and subsequently filed the damages lawsuit against her, her mother, and Min Hee-jin.
This ongoing legal process highlights the complex financial and contractual issues at play in the K-pop industry, particularly when disputes arise between agencies, management, and artists.
