ADOR has filed a lawsuit against former NewJeans member Danielle, seeking the termination of her contract along with a penalty for breach of contract and damages. The lawsuit follows the termination of her contract with ADOR.
Attention is now focused on the potential scale of the penalty and damages Danielle may be required to pay. Estimates suggest that the penalty alone could reach 100 billion won. Furthermore, concerns have arisen that this penalty may not be dischargeable through personal rehabilitation or bankruptcy, depending on Danielle’s culpability.
ADOR announced that they had notified Danielle of the termination of her exclusive contract as of December 30th, while the remaining NewJeans members—Haerin, Hyein, and Hanni—have returned to the agency.
The penalty for breach of contract, as outlined by the Fair Trade Commission’s standard exclusive contract, is calculated by multiplying the average monthly revenue over the two years preceding the contract’s termination date by the remaining contract period. ADOR reported revenues of 110.3 billion won ($76.9 million) in 2023 and 111.1 billion won ($77.5 million) in 2024. Notably, ADOR has no other artists besides NewJeans, and Danielle’s exclusive contract was set to run until July 2029, leaving approximately 4 years and 7 months at the time of termination.
If the average monthly revenue per NewJeans member is estimated at 2 billion won ($1.4 million), the penalty for breach of contract based on the remaining contract period would exceed 100 billion won ($69.7 million). Initial estimates had suggested that the total penalty for all five NewJeans members could range from 400 billion ($279 million) to 600 billion won ($418.4 million). NewJeans had previously argued that the responsibility for the contract termination lay with HYBE and ADOR, asserting that there was no reason for them to pay the penalty. However, the court ruled in the first trial of ADOR’s lawsuit, confirming the validity of the exclusive contract and that ADOR was not responsible for the termination.
The penalty for breach of contract serves as a strong sanction and can be claimed separately from damages. Courts also retain the discretion to reduce excessively high penalties. Danielle is expected to dispute the scale of the penalty with ADOR in court.
Should Danielle lose the damages lawsuit, the debt for damages may not be dischargeable through personal rehabilitation or bankruptcy. ADOR explained that it terminated Danielle’s contract due to her breach of the exclusive agreement and had requested corrective action from her, but no correction was made within the specified deadline.
Legal experts suggest that Danielle may have intentionally breached the contract. In such cases, the debt for damages could be considered a “non-dischargeable debt,” meaning it cannot be cleared even through personal rehabilitation or bankruptcy.
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