HYBE appealed the initial ruling that required it to pay 25.5 billion won in put option proceeds to former ADOR CEO Min Hee-jin, who is now the CEO of ooak Records. HYBE also requested a stay of execution to pause the enforcement of the initial judgment until the appellate ruling.
HYBE Appeals Ruling on ADOR Put Option Payments
According to legal sources on the 20th, HYBE filed a notice of appeal the previous day with the Seoul Central District Court Civil Agreement Division 31, led by Presiding Judge Nam In-su. In this filing, HYBE also asked the court to suspend the effects of the initial ruling.
On the 12th, the court in a lawsuit regarding payment for stock sales ordered HYBE to pay former CEO Min 25.5 billion won in put option proceeds. It also ordered payments of 1.7 billion won and 1.4 billion won to two individuals. One person named Shin, former ADOR deputy CEO, and a person named Kim, former director, who both notified the exercise of the put option alongside Min.
Background of the Dispute
The court dismissed HYBE’s lawsuit that sought to confirm the termination of the shareholders’ agreement with former CEO Min. Since the basis for the put option claim is whether the shareholders’ agreement terminated. The court considered both cases at the same time.
Former CEO Min and HYBE are in conflict since April 2024 over claims of a management takeover against NewJeans. In August 2024, HYBE reported in its semiannual report that it had terminated the shareholders’ agreement with former CEO Min. In November of that same year, Min notified the exercise of the put option, which began the legal dispute.
The put option proceeds are based on 13 times ADOR’s average operating profit over the two previous fiscal years, 2022 and 2023. This amount reflects 75% of former CEO Min’s equity ratio. ADOR reported an operating loss of 4 billion won in 2022. But showed an operating profit of 33.5 billion won in 2023. As of the audit report released in April 2024, former CEO Min’s holdings listed as 573,160 shares, which is 18%.
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