ADOR, HYBE’s subsidiary, reportedly had grounds to demand a fine of more than ₩1 trillion from NewJeans member Danielle following her exclusive contract termination notice, but ultimately chose to submit a significantly reduced demand 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 business and unfulfilled advertising obligations. Additional lawsuits were also filed against Danielle’s mother and former ADOR CEO Min Hee Jin, seeking ₩100 billion in damages for alleged liability for NewJeans’ departure and delayed return.
According to the exclusive contracts signed between ADOR and NewJeans members, the penalty clauses reportedly follow the standard government-issued exclusive contract for popular culture artists. The penalty formula is calculated as follows:
Average monthly earnings in the two years preceding termination × months remaining on contract
Based on ADOR’s reported revenues of approximately ₩1.1 trillion per year in both 2023 and 2024, with NewJeans as the sole performer, each member generated approximately ₩220 billion per year, or approximately ₩18 billion per month.
With Danielle’s remaining contract period estimated at 56 months, the mathematically calculated penalty amount reaches almost ₩1 trillion.
However, legal experts point out that the enforceability of such figures is far from guaranteed.
Unlike liquidated damages, contractual penalties cannot be reduced at the court’s discretion under Supreme Court precedent. That said, courts can still invalidate all or part of a penalty clause if it is deemed excessive or contrary to public policy. Industry insiders believe this legal uncertainty played a key role in ADOR’s decision to substantially lower its claim.
Legal analysts see ADOR’s approach as a strategic move to increase the likelihood of court approval while reducing litigation risk and burden of proof. This was commented by lawyer Ahn Seul-ah of the Daejin law firm “A demand of ₩300 billion preserves the validity of the penalty clause by increasing the court’s willingness to accept it.” This was added by lawyer Kim Yeon-soo of the One law firm demanding the maximum possible amount could entail the risk of partial total invalidation of the clause.
ADOR further alleged that Danielle attempted to pursue advertising contracts and outside business without consultation while her exclusive contract remained legally valid, further increasing commercial risk for the agency. Industry observers note that unlike typical contract disputes in which artists argue for termination due to transaction issues or breach of trust, this case stands out because the exclusive contract has already been declared valid.
As the legal battle continues, the court’s assessment of actual damages, revenue contribution and contractual obligations will likely determine the final outcome. The case is widely seen as a landmark controversy that could affect how penalty clauses are applied in future K-pop contracts.
Sources: Chosunbiz
