[Exclusive] Appeal on Repayment of Loona's 3.5 Billion Won Investment Rejected; Initial Ruling Upheld
An appeal filed by the group Loona's label regarding the lawsuit for repayment of 3.5 billion won (~3 million USD) of investment funding has been rejected. Loona must return the full amount to the investor.
On the 14th, the Seoul High Court (35th Civil Affairs Division) upheld the initial ruling in the appellate suit filed by Loona's agency, Blockberry Creative, and its parent company, Polaris, against an investment repayment lawsuit. It explained, "The Loona party was absent on more than two hearing dates of the appellate suit, so the appeal is considered withdrawn." Thus the agency's appeal has been rejected, and Polaris and Blockberry Creative must return the full 3.5 billion won to the investor, Donuts. The ruling of full repayment casts a red light on the company's management as well as on Loona, which has activities forthcoming.
Donuts, the second-largest investor in Blockberry, initially filed a repayment lawsuit claiming that it had invested 3.5 billion won in Blockberry's parent company of Polaris but Loona had not fulfilled the promised contract. The court initially ruled that "The Loona side must return the invested amount in full", and the agency filed an appeal. The case was sent to the High Court in February, but as both sides did not attend the hearing dates, the appeal has been rejected.
Polaris was also involved in litigation against Donuts last year. Polaris partnered with Donuts in 2017 to begin the Loona development project, and received 400 million won (~340,000 USD) to be used as deposit towards a space lease (place-based branding contract). However, they were sued for failing to repay 360 million won, deducting the repaid amount of 40 million. The court sided with Donuts. It has been reported that Donuts plans to assert rights on Loona according to the investment agreement, so as to prevent Loona from having its agency affiliation changed or transferred.
Loona debuted as a 12-person full group in August 2018, and garnered attention for production by chairman Lee Soo-man of SM Entertainment. Loona won first place in Mnet's "M! Countdown" in March with "So What". The group is preparing for a comeback in this latter half of the year.