HYBE subsidiary ADOR reportedly had grounds to demand a penalty exceeding ₩1 trillion from NewJeans member Danielle following her notice of exclusive contract termination but ultimately chose to file a significantly reduced claim of approximately ₩300 billion, citing legal risk management and evidentiary burden.
According to entertainment industry sources on January 9, ADOR filed a lawsuit against Danielle seeking a total of ₩331 billion, including ₩300 billion in contractual penalties and ₩31 billion in damages related to suspended activities and unfulfilled advertising obligations. Additional lawsuits were also filed against Danielle’s mother and former ADOR CEO Min Hee Jin, demanding ₩100 billion in damages over alleged responsibility for NewJeans’ departure and delayed return.
Under the exclusive contracts signed between ADOR and the NewJeans members, penalty clauses reportedly follow the government-issued Standard Exclusive Contract for Popular Culture Artists. The penalty formula is calculated as:
Average monthly revenue over the two years prior to termination × remaining months of the contract
Based on ADOR’s reported revenues approximately ₩1.1 trillion annually in both 2023 and 2024, with NewJeans as its sole artist each member generated an estimated ₩220 billion per year, or roughly ₩18 billion per month.
With Danielle’s remaining contract period estimated at 56 months, the mathematically calculated penalty amount reaches nearly ₩1 trillion.
However, legal experts emphasize that the enforceability of such figures is far from guaranteed.
Unlike liquidated damages, contractual penalties cannot be reduced at a court’s discretion under Supreme Court precedent. That said, courts may still invalidate all or part of a penalty clause if it is deemed excessive or contrary to public order. Industry insiders believe this legal uncertainty played a key role in ADOR’s decision to substantially lower its claim.
Legal analysts view ADOR’s approach as a strategic move to improve the likelihood of court approval while reducing litigation risk and the burden of proof. Attorney Ahn Seul-ah of Law Firm Daejin commented that “a ₩300 billion claim preserves the validity of the penalty clause while increasing the court’s willingness to accept it.” Attorney Kim Yeon-soo of Law Firm One added that claiming the maximum possible amount could risk partial invalidation of the clause altogether.
ADOR has also alleged that Danielle attempted to pursue advertising contracts and external activities without consultation while her exclusive contract remained legally valid, further increasing business risk for the agency. Industry observers note that unlike typical contract disputes where artists argue termination due to settlement issues or breakdown of trust this case stands out because the exclusive contract has already been ruled valid.
As the legal battle continues, the court’s assessment of actual damages, contribution to revenue, and contractual obligations will likely determine the final outcome. The case is widely seen as a landmark dispute that could influence how penalty clauses are enforced in future K-pop contracts.
Sources: Chosunbiz
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