Commentary by Attorney Ko Sang-rok from Kim & Chang on the New Jeans press conference

1. Exercise of New Jeans’ right of cancellation
- If no correction is made within 14 days, New Jeans may unilaterally terminate the contract.

- However, whether the termination is justified will be a matter to be determined later in the lawsuit. In particular, it seems important whether the content of the certified letter, No. 8, guarantees an independent and creative work environment.

- If Adore's fault is 100% acknowledged, New Jeans is not obligated to pay the penalty. Even if Adore is not 100% at fault, the penalty will be reduced accordingly.

- According to the standard contract, if there is a legitimate reason that makes it difficult to correct within 14 days, the correction period can be extended for another 14 days. However, since Adore said that more time was needed, if I were New Jeans' attorney, I would have advised Adore to give him as much time as possible to make future litigation more favorable.

- What Newzin is likely to claim:
Since Adore had neither the will nor the ability to correct it anyway, there was no need to wait until 24:00 (expressions such as ‘will and ability’ show that he had received sufficient legal advice in advance)

- What Adore seems to be claiming:
The fact that they announced the termination through a press conference before 14 days had even passed means that it had already been decided that Adore would leave, regardless of whether or not he would take corrective action, and that giving them 14 days was just a formality.

- It could be misunderstood as if they were hastily organized, as if they thought that if they were given a little more time, the adore would really fix it (although that may not actually be the case, it's like tying shoelaces in a cucumber field).


2. Regarding New Jeans’ position that it will not file a lawsuit first

- The right to terminate is a right of formation, so it is not necessary to file a lawsuit. The only issue is whether the right to terminate is legitimate.

- It means that we won't attack first, and that we can defend ourselves if Adore files a lawsuit first.

- It is unlikely that Adore will file a lawsuit for damages right now. It is expected that Hive will start by filing other, lesser lawsuits that it thinks it can win.

- However, if Newzins contracts with a third party and engages in entertainment or broadcasting activities, Adore will issue an injunction prohibiting broadcasting activities, etc.

- The reason other groups in the past filed for injunctions first is because, regardless of whether they win or lose the final lawsuit, they can legally carry out their activities until the lawsuit ends after receiving the injunction.

(Even if you lose later, the activities you did during that period are legal)

- However, if you sign a contract or work with another agency without an injunction, if New Jeans ultimately loses the lawsuit later, you will have to pay damages to Adore in addition to the penalty.

- Of course, if New Jeans does not intend to sign a contract or work with another agency or CEO Min right now, or if New Jeans wins 100%, there is no problem even if the injunction is not filed first.

- If time passes while negotiating without termination, and if Adore accepts New Jeans and Adore's sales decrease or disappear (even if they lose in the final legal dispute), New Jeans' penalty will definitely decrease by that amount. This could also be a strategy.

- Despite these risks, the fact that they decided to terminate yesterday shows that Newjins is 100% confident in their legitimacy and victory.

- It seems that Newjins is currently placing more importance on settling with Hive as soon as possible than on a more economically advantageous outcome (i.e., getting paid a couple more pennies).

3. Speculation on why former CEO Min Hee-jin exercised the put option in November of this year instead of next year

- Some speculate that Representative Min anticipated an unfavorable outcome in the ongoing criminal case and attempted to block the negative impact on the civil lawsuit, but that speculation is nonsense (the outcome of the criminal case will inevitably affect the civil case, regardless of whether he is guilty or not, and the effect will not change even if the put option is exercised early).

- The reason why Representative Min did not exercise the 50 billion won put option next year but exercised the 26 billion won put option in November of this year may be because he knew that New Jeans would leave Adore within this year.

- If New Jeans leaves and Adore's corporate value disappears, Adore's stock value could be assessed at less than 50 billion won. In this case, it would be a significant burden for the court to determine that it is legitimate for Representative Min to sell 13% of Adore's stock and receive 50 billion won. In the end, it would appear that Adore is reduced to a shell and all the money and New Jeans are taken away.

- However, if the event is held in November of this year and only 26 billion won is claimed, for example, if Adore's value is assessed at 50 billion won, then Representative Min will take the 26 billion won put option and Adore will take the remainder, making it easier for the court to accept.



- Personally, I don't think that Representative Min seriously planned or implemented a tempering plan to take New Jeans out.

- However, if it is revealed that New Jeans terminates the contract and begins working together immediately after Representative Min resigns as director and exercises the put option, it could have a negative impact on the lawsuit.

- I expected that Newjins would wait at least a few months for the results of the first trial of Representative Min's lawsuit and make a decision, so I was surprised that it didn't happen. Personally, I think it would have been better for Newjins not to terminate it now.

- Even if you win 100% in other lawsuits, the only way to buy the trademark part is through negotiation with Hive, but it doesn't seem easy. Personally, I think it would have been better to negotiate including the trademark part instead of terminating the contract.