Hello, this is attorney Kim Kwang-sik of Cheongchul Law Firm.

The litigation arising from the control dispute between HYBE and Min Hee-jin, the former CEO of ADOR, has now produced first-instance decisions. One strand concerns the validity of the exclusive management agreement between the girl group NewJeans and ADOR; the other concerns the shareholders' agreement (and its put option) between Min and HYBE.

On 30 October 2025 the Seoul Central District Court found for ADOR in its action to confirm the validity of the exclusive agreement against the NewJeans members, and on 12 February 2026 the same court largely upheld Min's claim against HYBE for the put option price. Although both actions grew from the same dispute, the contracts differ in nature, and so did the issues and outcomes.

This article uses those two decisions to explain when an artist may terminate an exclusive management agreement, why the court refused to accept NewJeans' termination, when a put option under a shareholders' agreement may be exercised, and what agencies, artists and investors should check in their contracts.

[Question] What is required for an artist to terminate an exclusive management agreement? Why did the court refuse NewJeans' termination while upholding Min Hee-jin's put option claim?

[Answer]

1. Two strands — the exclusive agreement and the shareholders' agreement

A single control dispute split into two actions. The first concerned the "exclusive management agreement" between the artists (the NewJeans members) and their agency (ADOR): when NewJeans asserted termination on the basis that the relationship of trust had broken down following Min's removal, ADOR sought confirmation that the agreement remained valid. The second concerned the "shareholders' agreement" between Min and the majority shareholder HYBE, under which Min exercised a put option over her shareholding in ADOR and claimed the price.

Both produced first-instance decisions. ADOR won on the exclusive agreement, which was held valid; Min won on the put option, with HYBE ordered to pay approximately KRW 25.5 billion. Because the two contracts are of different kinds, each is governed by its own body of law.

▶ Summary One control dispute split into an artist–agency exclusive agreement action and a Min–HYBE shareholders' agreement (put option) action, with different first-instance outcomes.

2. When can an exclusive management agreement be terminated — breakdown of trust and breach of a material obligation

An exclusive management agreement involves long-term, close cooperation between artist and agency, and the Supreme Court treats the maintenance of a high degree of trust as essential to such contracts. Two grounds therefore allow an artist lawfully to terminate: breach by the agency of a "material obligation" under the agreement, or a breakdown of the relationship of trust beyond repair.

Neither is easily established. Dissatisfaction with the agency or internal conflict is not enough; the ground must be serious enough that the purpose of the contract can no longer be expected to be achieved. That is precisely where NewJeans' case turned.

▶ Summary Termination requires either a breach of a material obligation by the agency or an irreparable breakdown of trust; dissatisfaction and conflict alone will not do.

3. Why the court refused NewJeans' termination

On 30 October 2025 the Seoul Central District Court held the exclusive agreement between ADOR and NewJeans valid. NewJeans argued that trust had broken down with the removal of Min — known as the "mother of NewJeans" — and that the agency had breached its obligations by failing to act on the leak of trainee-era material.

The court rejected those arguments. The contract contained no clause requiring a particular individual to perform management functions, or permitting termination if that person left; and ADOR had in fact continued to provide management services after Min's departure, including album releases, preparation for concerts and a world tour, and advertising opportunities. The departure of one individual therefore did not itself break down the relationship of trust or amount to breach of a material obligation. The court added that artists should not readily be permitted to walk away without justification after building recognition and a fanbase on the back of substantial upfront investment by the agency.

▶ Summary The court held that the departure of one individual was neither a breakdown nor a breach. The absence of a key-man clause and ADOR's continued management services were decisive.

4. Min Hee-jin's put option win — the effect of a shareholders' agreement

Min exercised a put option over her ADOR shares under the shareholders' agreement with HYBE and claimed approximately KRW 26 billion. HYBE responded that it had terminated the shareholders' agreement because Min had breached it through breach of trust and an attempt to seize control.

On 12 February 2026 the Seoul Central District Court declined to accept HYBE's allegations of breach of trust and attempted seizure of control, held the exercise of the put option valid, and ordered HYBE to pay approximately KRW 25.5 billion. HYBE's parallel claim for confirmation that it had terminated the agreement was dismissed. The decision shows that to neutralise a right such as a put option, a party must actually establish a contractual ground for termination — a material breach — and that raising allegations is not enough.

▶ Summary The court rejected HYBE's allegations, upheld the put option and ordered payment of about KRW 25.5 billion. Terminating a shareholders' agreement requires proof of actual breach.

5. What agencies, artists and investors should check

First, at the contracting stage the parties should decide whether to include a "key-man" clause covering the departure of a key producer or executive, and how far to specify the content and standard of the management obligation. As this decision shows, where the contract says nothing about a particular individual, that person's departure will rarely ground termination. Artists should ensure that the conditions that matter to them appear in the contractual text.

Second, the level and calculation of liquidated damages and compensation for breach should be clearly specified, which improves predictability in any dispute. Third, put options in the shareholders' agreements commonly used in investment and control structures should specify exercise conditions and the counterparty's termination grounds precisely and strictly; as here, broad grounds such as "breach of trust" may not suffice to block the exercise of a right. Whether the contract is an exclusive management agreement or a shareholders' agreement, the outcome turns on how clearly the text was drafted.

▶ Summary Exclusive agreements need key-man, management obligation and liquidated damages clauses; shareholders' agreements need precise exercise conditions and termination grounds. The text decides the dispute.

These two decisions set important markers for contracting in the entertainment industry. An exclusive management agreement presupposes a high degree of trust, but terminating it requires specific proof of a material breach or an irreparable breakdown; the departure of an individual or generalised dissatisfaction is not enough. A put option under a shareholders' agreement is likewise protected once its conditions are met, and a party seeking to block it must prove an actual breach. Both outcomes show that what the contract says, and how it says it, determines where a dispute ends up.

Cheongchul Law Firm advises across entertainment and corporate matters — concluding, terminating and litigating exclusive management agreements, entertainment and content contracts, designing investment and control structures including shareholders' agreements and put options, and litigating liquidated damages, compensation and control disputes. Please contact us if you need support on exclusive management or shareholders' agreements.