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[News] Dispatch Article on Chuu and Blockberry Creative (221219)

Dispatch: [Exclusive] “Is it a Right? Or an Abuse of Power?”... The Whole Story Behind the Chuu and Loona Situation


In December 2017, Chuu (Kim Jiwoo) wrote a letter by hand. The recipient? Blockberry’s Team Lead B.


“Hello! Team Lead B. I got to debut today, December 28, as Loona’s tenth member Chuu! Thank you so much. I’m so happy that I got to debut under such a good opportunity, and right now it still doesn’t feel real.”


Chuu added a postscript at the end of her letter.


“Do you remember that one day in 2016? I was so inexperienced and lacking, but after working hard [omitted]... Seeing this, I think we really can’t see an inch ahead when it comes to how things turn out. Heheh from now on I will grow even further and show you lots of great things.”


Just as Chuu said, you really can’t see an inch ahead when it comes to life. Below are KakaoTalk messages that Chuu sent to Team Lead B in June 2022.



—- Conversation between Chuu and Blockberry Team Lead B


Chuu: With something like this [laughing] With 1 second, this is what you’re nagging over?


Chuu: Do you not want me to have affection?


Chuu: I’m sitting out this album


Chuu. You gotta be kidding me.


Chuu: Appearing or participating in stuff like Queendom, don’t even dream of it going forward


Chuu: Have no intent to reflect over one’s wrongdoings I see.


Chuu: Spoilers, don’t you know that other groups, our group, everyone does this stuff at fansigns and broadcasts?


Chuu: Are you not responding?


Chuu: Team lead-nim


Chuu: Reply.


Chuu: Reply.


Chuu [informal]: Are you seriously not gonna pull it together until I die and write down everything that’s happened so far before I die?




Team Lead B: Let me figure out what the situation is here.


Chuu: Didn’t team lead-nim send this?


Team Lead B: Right. I did not send that.


Chuu: Cut it out, watch it. I’m serious. This is my last warning


Chuu: Tell CEO A, word for word.


Team Lead B: We will give the internal staff another warning.


Chuu: So~~~~ooo pathetic seriously ㅋ


Chuu: Tell me who brought this up.


Chuu: That text [laughing] Seriously so ridiculous


Team Lead B: I’m looking at this and it seems that CEO A-nim told your mother.


Team Lead B: I will give one more warning to the internal staff so that Miss Jiwoo won’t be stressed out by things like this.


Team Lead B: I’m sorry for making you feel upset. I will apologize instead.


Chuu: Deliver what I said on KaTalk word for word. Before I sit out this album


Team Lead B: Yep. I will.


Chuu: I know it’s tough working with A.


Team Lead B: Not at all. Please be sure to eat your meals, and be strong.



(Additional explanation for what happened at that time. On a live broadcast, Chuu showed a little bit of an upcoming song’s choreography. CEO A texted Chuu’s mother, saying “The key choreography can’t be revealed yet, what will we do?”. Chuu’s mother took a screenshot of the conversation with CEO A and sent it to Chuu. At this, Chuu confronted the team lead, asking “who sent this text”. This happened on June 9, 2022.)


[Additional text in screenshot 1 (CEO A → Chuu’s mother)]

Esther Sunhye Kim: Mother.. Our key choreography… It can’t be revealed yet, what will we do…? The members are going to have a meeting today regarding the world tour.. We expect complaints…

Chuu’s mother: CEO-nim~ Was this event not held under Blockberry’s management?

Esther Sunhye Kim: I provided the text out of worry about complaints, ma’am.

Esther Sunhye Kim: May we receive today the deadline change request that we delivered yesterday?


[In screenshot 3 (Chuu → Team Lead B)]

Chuu: With something like this [laughing] With 1 second, this is what you’re nagging over?


Chuu: Do you not want me to have affection?


Chuu: I’m sitting out this album


Chuu: Guess I’ll never promote the album until I die, talk about other groups, my solo album


Chuu: And solo activities, that’s all I’ll ever talk about


Chuu: Appearing or participating in stuff like Queendom


Chuu: Don’t even dream of it going forward


Chuu. You gotta be kidding me


[Omitted]


Chuu: Are you not responding?


Chuu: Team Lead-nim


Chuu: Reply



In December 2017, Chuu was a warm girl. But five years later, she spat out harsh words against the company team lead. What happened, in the interim. We traced out the conflict between Chuu and Blockberry.




All Gone Wrong, from the Very Beginning


In her (2017) letter to Team Lead B, Chuu wrote that “I’m so happy that I got to debut under such a good opportunity”.


In truth, it was a good opportunity to debut. Loona was a project that revealed a new girl (member) each month. To collect twelve members of the full group, it took about two years.


Chuu is a beneficiary of the Loona system. Her trainee period was a mere three months. She joined the company in September 2017, and became a member of the group in December as the tenth member.


During the 542 days it took until the full group album, Blockberry released 12 solo albums and three unit albums, for a total of 15. They also filmed music videos for each. About six billion won were poured into this effort.


(Thanks to that) Chuu was able to grab an early chance at debut. Conversely, (because of that) the company depleted its bank account in a short amount of time. This was the beginning of the tragedy.



Blockberry, A Cheap Trick Returns as a Boomerang


On December 4, 2017, Chuu signed an exclusive contract with Blockberry.


Article 7 (on the distribution of earnings and other items) Party A (Blockberry) / Party B (Chuu)


In distributing the earnings between A and B, the primary principle shall be the deduction of all expenses. Entertainment activity expenses, album production expenses, and all expenses related to B (investment expenses, training expenses, personal expenses) shall be aggregated in the determination of payments.


  1. A and B shall firstly share revenues from all entertainment activities at a proportion of 70% A, 30% B.

  2. Subsequently, all expenses from B’s entertainment activities shall be settled at a proportion of 50% A, 50% B.


Certainly, this is a problematic contract. Revenues and expenses are shared at different proportions. In essence, earnings are split 7:3 and expenses are deducted 5:5. According to principle, expenses should also be split at 7:3.


Additionally, Blockberry opted for a post-expenses settlement system. Here, the revenues are divided first, then expenses are deducted. This is essentially a cheap trick. Blockberry has saddled Chuu with 20% of the expenses that the company should have accounted for.


Blockberry invested a huge sum of money to launch Loona. It was that risky of a project. For the company, (for the time being) it was important to stay afloat. Thus it changed the expense handling (7:3 to 5:5) in a non-standard way.


But this cheap-trick contract ultimately became a boomerang. It came back to them as grounds for a contract termination lawsuit.



The Balance of Power Flips


Starting in January 2022, it was Chuu’s time. She filed for an injunction to suspend the effect of her exclusive contract. And in March, the court sided with Chuu. The steps were laid for her independent path.


The balance of power flipped. Blockberry was now the one feeling urgent. It had already dumped more than 15 billion KRW into Loona. To sustain the team, it had no choice but to hold onto Chuu. The company proposed an addendum of agreement.


How did the positions of Blockberry (the more powerful) and Chuu (the less powerful) change? Dispatch obtained a copy of the addendum to the contract, filed last April. This addendum takes precedent over the exclusive contract.


First, the revenue share (3:7) changed. They agreed that Blockberry would keep 30% of revenue, and Chuu would keep 70%. If expenses exceed revenues, Blockberry agreed to shoulder 50% of the expenses.


They also allowed for claims of damages. If one of the parties suffered damages, the afflicted party can request 50 million won. Additionally, they included a provision that the party could immediately terminate the contract.


◆ Chuu, the Right to Decline Activities


Chuu also secured the right to decline participation in Loona activities. It was stated that “To secure Chuu’s individual schedules, she reserves the right to be absent from Loona activities in the following manner.”


The “following manner” is as below.


  1. The right to be absent for three or fewer Loona full-group schedules per month

  2. The right to be absent for three or fewer Loona album activities per month

Additionally, Chuu added that “Regarding schedules not agreed upon herein, the schedule of B takes precedence,” and that “If A has no choice but to request a schedule change, it may request such a change up to once.”


Lastly, Blockberry agreed to cede control of all business relating to Chuu. They stamped to approve a demand from Chuu’s side that “All external proposals, including broadcast and advertisement, must be ceded immediately at no cost.”


The expiration date of the addendum contract was December 31, 2022.



The Addendum Is Activated


Addendum Contract Article 5 (Miscellanea), Item 2.


“If one party has caused damages to the other, the party must pay damages at 50 million KRW per incident, and the contract may be terminated immediately.”


On May 25, 2022. The day after the filming of the music video for “Flip That”. Chuu’s mother activated Article 5, Item 2 of the addendum contract.


“It is stated in Article 5, Item 2 of the addendum contract. Despite several previous agreements on the schedule and requests for documents and texts, it is already the 25th of May, and your company has unilaterally violated the contract, so I request that you process the damages payment.” (Mother’s text message)


Chuu’s mother notified CEO A to pay 50 million KRW in damages. What made her upset. The hint is in “It is already May 25”. The claim being that a delay in the music video filming interfered with solo schedules.


First, a brief summary.


① At 9am on May 24, filming for the “Flip That” music video began.


② The filming was delayed, and the group choreo scene scheduled for 11pm (#16) was also delayed.


③ Blockberry requested an understanding of around an hour of delay.


④ Chuu’s mother claimed 50 million won due to the filming delay.


The next day on the 25th, Chuu was scheduled for a solo ad filming. According to her mother, the MV filming delay interfered with her individual schedule. Chuu’s mother immediately claimed damages from Blockberry.



◆ What Happened on the MV Filming Site


May 25th, 12:27am, a Loona member made a call to CEO A.


Member: CEO, this is C. Is a short phone call possible?


CEO A: Yes yes C.


Member: We just heard that Jiwoo is going to leave. It was supposed to be a group choreography scene but Jiwoo is suddenly about to leave so…We prepared this as 12 but now we have to do this with 11. We found out about this suddenly. We have to follow along with this but it doesn’t make sense so I’m making this call.


CEO A: Can you check how much is left till the overall schedule ends?


Member: We don’t know that so… Is it okay to say this through the manager?


CEO A: Yes yes.



May 25th 12:35am, CEO A made a call to Chuu’s mother.


CEO A: You must be waiting to come and pick up your child at the site, right. I think the situation is that the group choreography scene isn’t done yet. [Chuu’s] mother, I’m very sorry to say this but I think it’ll be delayed by about 1 hour, so I’m calling because I’m wondering if you’re okay waiting.


CEO A: The situation must be awkward for Jiwoo as well. It’s a case where the 12 of them prepared the group choreo together, and they have to do that but it hasn’t been filmed yet… [omitted] But now (Jiwoo) says that she’s going to go all of a sudden so… Hello?


Chuu’s mother: I’m listening.


CEO A: Ma’am, I know you must have come a long way and it would have been tough, but just a little–


Chuu’s mother: Anyway, okay. Alright.


CEO A: Ah, then could you wait for a bit? I think it would be a really hard situation if she pulls out of the group choreo scene right now.


Chuu’s mother: Anyway, alright. I got it.



◆ A ‘Group Choreo’ Exchanged for 50 Million KRW


As soon as she hung up the phone, Chuu’s mother texted CEO A. She asserted that the filming delay was a violation of contract. She sent advance notice that she would be claiming damages under Article 5, Item 2 of the addendum.


Chuu’s mother: We’ll wait, but we are going to make a claim regarding the contract violation. Your company included that item, so please adhere to it.


CEO A: If you will make a claim for contract violation anyway, then we’ll wrap up with her joining us until the last scene.


CEO A: As soon as you confirm whether that is okay, I’ll direct management. Please let me know. The members are also waiting, so please respond soon.



CEO A called Chuu’s mother again.


Chuu’s mother: Hello.


CEO A: Do you have time to speak?


Chuu’s mother: I don’t want to talk right now. What did you just text me? You want to finish everything remaining since we’re making a claim anyway? We have the ad schedule tomorrow and… I don’t want to talk right now so just hang up.


Chuu’s mother hung up first. The task for CEO A: apologize again. The CEO immediately texted an apology on KakaoTalk.


CEO A: It’s not that we didn’t consider Jiwoo’s situation. Please understand that this was caused by a delay on the site. We also find it regretful that we went over time. We also apologize greatly for the difficulties this might cause for Jiwoo’s schedule on the 25th.


Chuu’s mother: Then you shouldn’t have written a text like that.


CEO A: Nevertheless, please consider one more time, and if it’s possible, I’d like to ask that she participates through Scene #19.


With Blockberry agreeing to reimburse 50 million KRW, the filming resumed. Fortunately, the group choreography scene (#16) was able to be filmed. Chuu went home around 3AM. However, Scene #19 which CEO A asked for never came to be. The set construction fee also… went up in smoke.



◆ Is It Chuu’s Abuse of Power?


Chuu left Loona. No, she was removed. On the surface, the reason was Chuu’s abuse of power. As evidence for this, Blockberry cited KakaoTalk conversations between Chuu and staff (2021.08 ~ 2022.07).


For example… December 28, 2021.


Team Lead B: Hey Jiwoo. The management team reported to me that you won’t be participating in Loona album activities anymore. Is that right by any chance?


Chuu: I am participating though?


Chuu: I’ve never once skipped out on broadcast schedule ^^ There’s not a single schedule I didn’t participate in after saying I wouldn’t do broadcasts anymore


Chuu: Please don’t lie. There is nothing scheduled that I skipped, and you people don’t have the ability to get any (broadcast) schedules anyway, and there is no justification to pull out of schedules already set, so please don’t cause someone else to be dishonored.


Chuu: Seriously, all you people know how to do is lie. Tsk. Get some rest please~


From Team Lead B’s perspective, Chuu’s words are scathing. But Chuu has already lost her trust in the company. She is defining the company as an incompetent collective. Further, she strongly sees them as “liars”.



◆ Is It Blockberry’s Incompetence


December 30th, 2021.


Chuu: Team Lead? My mom has asked for my seal.

(Translator’s note: Certain financial transactions in Korea are signed by stamping a personal seal, instead of a written signature)


Chuu: Is the company not even going to give me my seal?


Chuu: Are you ignoring my mother?


Chuu: Not giving money~ Not giving the seal either~ Not providing the documents detailing the basis for my payments either~


Chuu: Blockberry is the best~


Team Lead B: We have never ignored your mother. About the seal, I will check with the company, then let you know.


Chuu: You said that you’d give it to me, but now it seems that you’re not. Oho


It is true that Chuu’s distrust started with money. It can be surmised from the words “Not giving money~ Not providing the documents detailing the basis for my payments either” For reference, B is a person who participated in the first half of Chuu’s casting in 2017.






◆ Is It a Media Play by Chuu?

Chuu-father. It’s a term that combines Chuu and father, implying that Loona is living off of what Chuu makes. However, this is misinformation. Loona operates on a per-person settlement system. What Chuu makes, goes to Chuu. What a member makes, goes to that member.


October 5, 2021, a text between Chuu and CEO A.


Chuu: CEO-nim, am I by chance currently paying everyone’s debt as well? I’m not, right?


CEO A: Of course not.


According to Blockberry’s settlement data, Loona has earned 18.2 billion KRW between 2016~2022, and spent 16.9 billion KRW (including direct expenses). That’s 18.2 billion in revenue, and 16.9 billion in expenditure.


According to their strange settlement method, “Loona’s cut” is 5.4 billion KRW. Then subtract expenses (50%) of 8.4 billion KRW, leaving around negative 3 billion KRW. Dividing that by 12 people, there is around 200 million KRW of debt remaining per member.


However, Chuu’s situation is different from the other members’. Last year in December, she turned net positive in settlements. In fact, in January of this year, she received her first payment of 70 million KRW. To this date, her total amount received is around 220 million KRW.


In addition, this past April, she set up a “Chuu Corporation”. After the court granted her the injunction, this was her setting out on an independent path. Since April, she has kept 100% of her earnings from individual activities. Blockberry only provides support for “Loona” group activities.



◆ Blockberry Provided the Cause

Dispatch secured conversations and transcripts of conversations between Chuu and CEO A, Chuu and Team Lead B, Chuu’s mother and CEO A, as well as Chuu’s mother and Team Lead B. Through their texts and calls, we were able to obtain a comprehensive understanding of what happened over the past year.


Blockberry took on a project it couldn’t handle. Over five years, they poured in around 17 billion KRW. They released 24 albums, and filmed 44 MVs. It was also unusual that they had a single release and MV for each of the 12 members.


Chuu is a beneficiary of this reckless attempt. As a result of this, she was able to join a group after just 3 months of being a trainee. In addition, Blockberry developed Chuu as a strategic member. It is also true that they provided more opportunities for her. (Of course, it’s also true that Chuu herself did well.)


Despite this, Blockberry is not in the realm of being excused. The primary cause for this conflict is their trickery in how they dealt with expenses. Had Blockberry handled expenses according to typical contracts, the issue of exclusive contract termination would not have come up.


“It would have been difficult to maintain the company if expenses were not 50/50. At the time we thought it was a way to save the company and the group. So we explained to the members, and everyone agreed.” (Blockberry)



◆ Chuu Gains the Upper Hand, Again


Blockberry presented the cause. Chuu attacked their weak point. Through a separate contract, she gained the upper hand (70/30). Blockberry fell to being the employer who has to act carefully, and Chuu rose tall as the employee who makes the decisions.


In this past year, at least, Chuu was the individual greater than the team. She picked what to participate in, and the time. The conversation between the two sides proves this. Blockberry’s position became one of receiving Chuu’s bidding.


Ultimately, Blockberry cut ties first. Determining that it was too much to continue. In a way, it seems that it was Chuu who induced this. You can get a glimpse of her dissatisfaction with Blockberry. The KakaoTalk conversations prove this.


Dispatch needed to meet Chuu. To hear why she turned away - rather, why she can’t return. And last week, after some difficulty, we were able to contact a representative for Chuu, who first pointed out the issues with settlement.


“Back then, I didn’t even know the difference between pre- and post-[expenses] settlements. I signed out of the joy of being able to debut. I didn’t even know that in this kind of [post-expense] structure, you can’t properly receive payments.” (Chuu)


◆ At Any Rate, the Conflict Is a Foregone Conclusion


Dispatch sent a questionnaire a week in advance. Chuu conveyed her positions through a representative. We’ve organized it in Q&A format.



Dispatch: Did you not know that there was a problem with the contract?


Chuu: Last year (2021), one member asked, “Isn’t it time for you to be receiving payments?” That’s when I recognized that there was a problem. I got an explanation about the contract at the time. However, I didn’t exactly understand the post-settlement system. And didn’t really have the time to fully ask about things…


Dispatch: Is that why you filed a lawsuit for contract termination?


Chuu: I did the math. If expenditures are over 70% of the revenue, the final settlement would come out negative. It was a system where you get more into debt the more you work. It was definitely a 70/30 contract, but it could become a 90/10 or 100/0 in practice. It was late, but I wanted to make this right.


(For example, let’s say that with 100K KRW revenue, comes 70K KRW expenditure. Company gets 70K, Chuu gets 30K. Then let’s subtract the costs, 50/50, 35K each. So the company earns 35K. Chuu’s settlement is -5K. Chuu wanted to point out this problem.)


Dispatch: Chuu’s settlement turned positive in January 2022. You’ve earned over 200 million KRW just this year alone?


Chuu: That is right. It’s a per-person settlement system. Due to having a lot of solo activities, I was able to earn payments first. But I don’t know if the expenses are being managed properly. I never got the data about the basis for settlement.


Dispatch: Blockberry countered that by saying that it commissioned an audit from an external tax firm. They’re claiming that there’s no issues with how expenditures are managed?


Chuu: I never asked for an external audit. The company suddenly proceeded with that. I can’t 100% trust that, either. The key point is, I never properly got the settlement data. And that’s where I lost trust.


Dispatch: In April 2022, you wrote a supplementary agreement. Chuu’s split would be raised to 70%. You also took the lead in decision-making?


Chuu: Honestly, my trust in the company ended last year. I didn’t want to participate in Queendom either. But I also didn’t want to give up on Loona. I wrote the supplementary agreement so I could continue group activities.


Dispatch: But didn’t you prioritize solo activities over group activities? There was that bit of commotion on the MV set too.


Chuu: The MV filming was delayed and I was reimbursed 50 million KRW for that. However, I didn’t request that money just because of that incident. There were multiple issues regarding scheduling. So I made that claim as a sort of warning.

Dispatch: We have confirmed Kakaotalk logs and e-mails from both parties. It seemed almost like Blockberry was the one asking for permission.


Chuu: It’s true that they asked if I could participate in schedules. However there were parts that weren’t properly delivered as well.


(Blockberry flatly denies this part, saying that it delivered all official requests that it received for schedules.)

Dispatch: And the speech from you and your mother seemed harsh. We believe the company interpreted those parts as “power abuse”.


Chuu: Team Lead B was the only person (in the company) that I could get through to. I wasn’t angry at Team Lead B. I was complaining, upset about how the company operated. But Director "D"…


Dispatch: Director "D"?


(Chuu provided a recording of a call between her and Director "D". From November 2021, the conversation was about adjusting the earnings split.)


KakaoTalk:

Director "D": Think carefully about what I’m saying. There will be no downside for you. First things first, don’t write the contract. The mistrust regarding that has been resolved, right.


Director "D": But write down the message. Suppose we promised 50/50. Then, now… 70/30 and 50/50.


Director "D": Let’s just look at the arithmetic. We do 50/50 for Chuu Can Do It, the split.


Director "D": You finished grade school right? Haha. It’s not like you didn’t finish, right?


Chuu: Are you going to talk to me like that? I’m just thinking right now.


Director "D": I was joking, really. That really hurts.


Chuu: I don’t think we’re on joking terms.


Dispatch: Did this conversation affect your behavior?


Chuu: Director "D" treated me like a child. It felt like I was being looked down upon? The mistrust had already piled up before that, and this hurt. I thought that I would have to speak aggressively for them to listen… So there were times I spoke harshly. At the end of the day, I’m only human, so I made a mistake.


The conflict between Blockberry and Chuu was much more complicated than what was known to the public. It cannot be determined to be exclusively the fault of one side. It was a collaboration of payment settlement and distrust, of incompetence and disrespect.


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