HYBE, which lost its legal battle against former ADOR CEO Min Hee Jin and was ordered to pay 25.5 billion KRW (approximately 17.8 million USD) in stock sale proceeds following her exercise of a put option, has deposited funds with the court in an effort to suspend provisional enforcement of the ruling.
According to legal sources on February 25, HYBE submitted a litigation security deposit of 29.25 billion KRW (approximately 20.4 million USD) to the Seoul Central District Court.
On February 12, the Civil Agreement Division 31 of the Seoul Central District Court, presided over by Judge Nam In Soo, ruled in favor of former CEO Min in both HYBE’s lawsuit seeking confirmation of termination of the shareholders’ agreement and Min’s counterclaim demanding payment for stock sale proceeds. HYBE filed an appeal against the first trial ruling on February 19 and also applied for a stay of compulsory execution.
On February 23, the Civil Agreement Division 17 of the Seoul Central District Court, presided over by Judge Jang Ji Hye, granted the request and suspended compulsory enforcement of the put option payment until the appellate court delivers its verdict. In civil cases, the losing party may request a stay of execution to block provisional enforcement of a ruling. Courts typically grant such requests on the condition that the applicant provides collateral, usually by depositing a specified amount in cash or submitting a surety insurance certificate.
HYBE and former CEO Min signed a business agreement in November 2021, shortly after establishing subsidiary ADOR, which included provisions for stock options and other compensation. In March 2023, following the successful debut of NewJeans, the two sides entered into a separate shareholders’ agreement after Min requested additional compensation.
Under the agreement, if Min exercised her put option, she would be entitled to receive from HYBE an amount equivalent to 75 percent of her ADOR shareholding, calculated by multiplying ADOR’s average operating profit over the previous two fiscal years by 13.
However, HYBE filed a lawsuit in July 2024 seeking confirmation of termination of the shareholders’ agreement, alleging that Min had planned and executed an attempt to take NewJeans in violation of the contract. HYBE argued that the shareholders’ agreement had already been terminated and that it therefore had no obligation to honor the put option payment.
Min refuted HYBE’s claims as a novel fabrication pieced together from KakaoTalk messages and described them as an attempt at label taming. In November 2024, she filed a counter lawsuit seeking payment of the stock sale proceeds, asserting that she had validly exercised the put option while the agreement remained in effect.
In its first instance ruling, the court ordered HYBE to pay 25.5 billion KRW (approximately 17.8 million USD) to Min, 1.7 billion KRW (approximately 1.2 million USD) to former Vice CEO Shin, and 1.4 billion KRW (approximately 1 million USD) to former Director Kim.
The court found that Min's contractual breach was not serious enough to justify termination of the shareholders’ agreement before she exercised the put option. It was determined that exploring ADOR’s independence or raising concerns about alleged similarities between ILLIT and NewJeans did not exceed the scope of reasonable managerial judgment.
The panel stated that the loss of 25.6 billion KRW (approximately 17.9 million USD) resulting from contract termination is relatively clear and substantial, adding that termination would require a grave violation serious enough to justify such consequences and that abstract risks alone were insufficient.
Meanwhile, Min held a press conference the same day and publicly proposed that she would forgo receiving the 25.6 billion KRW (approximately 17.9 million USD) related to the put option if HYBE agreed to end all ongoing legal disputes.
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