10/29/2024

Min Hee-jin's Petition for Reappointment as CEO Dismissed

Min Hee-jin's Petition for Reappointment as CEO Dismissed...
"Inappropriate Filing"

On October 29, the Seoul Central District Court dismissed former ADOR (All Doors One Room) CEO Min Hee-jin's petition seeking reinstatement, which she had filed against HYBE.

The court found that her request did not meet the necessary legal requirements.

Chief Judge Kim Sang-hoon of Civil Agreement Division 50 ruled that despite a shareholder agreement guaranteeing a five-year CEO term,
"even if the injunction were granted, directors are under no legal obligation to enforce it, rendering the petition irrelevant."

The court explained in its decision that
"directors are expected to independently assess and make decisions in line with the duty of care and fiduciary duty under commercial and civil law," adding that "they are not legally bound to follow HYBE’s instructions."

Additionally, the court found it challenging to interpret the validity of the "procure" clause—a term requiring shareholders to direct voting decisions—as it potentially conflicts with foundational principles of commercial law.

Min Hee-jin's Petition for Reappointment as CEO Dismissed

This decision is likely to further reduce Min’s influence within ADOR.

With the court stating, "It is difficult to find grounds for a claim enforcing the contractual terms," similar petitions are expected to face challenges in the future.

HYBE expressed gratitude for the court's "wise judgment" and added, "We will focus on ADOR’s stabilization, advancing the multi-label structure, and supporting artist activities."

In contrast, Min’s team stated, "The dismissal is not about the validity of the shareholder agreement itself but a legal interpretation of the 'procure' clause’s enforceability.

The CEO term should be guaranteed under the shareholder agreement until November 1, 2026."

This dispute began on August 27 when ADOR's board of directors decided to dismiss Min, citing the need to separate creative and managerial roles for the label’s benefit and alignment with the multi-label approach.

HYBE's Chief Human Resources Officer Kim Joo-young was appointed as the new CEO.

Legal experts view this ruling as a pivotal moment in the dispute between HYBE and Min.

One lawyer commented, "The decision imposes substantial constraints on Min’s legal options, and further disputes will likely proceed to formal litigation."

Entertainment industry insiders predict that this case could spark new discussions on governance and management within the K-pop sector, particularly around strengthening the framework for multi-label operations within major entertainment firms.

Attention now turns to how HYBE and ADOR will redefine their relationship following this ruling and the potential impacts this will have on the K-pop industry.

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