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[News] Newsis: Chuu wins appeal case regarding non-validity of exclusive contract… Court: “Unreasonable income structure” (240308)


Chuu from the group LOONA, (25, legal name Kim Jiwoo) has won in an appeal filed by her former agency Blockberry Creative regarding her lawsuit which asked to “confirm the non-validity of her exclusive contract.”


On March 8th, the Seoul High Court’s 7th civil case division ruled in favor of the plaintiff (Chuu) in Chuu’s lawsuit against Blockberry Creative to confirm the non-existence of her exclusive contract.


Chuu, who had previously been in conflict with Blockberry over profit settlements, filed this lawsuit against Blockberry in December 2021. Last March, the court referred the case to mediation, but the two parties failed to come to an agreement.


In November 2022, Blockberry claimed that Chuu was expelled from the group on the grounds of power abuse, but Chuu countered by claiming there was no such power abuse and that the profit distribution in her exclusive contract was unjust.


In the first trial, Chuu’s representatives claimed: “By setting a penalty of three times the amount spent by the agency on top of 15% of the expected revenue from entertainment activities in compensation upon termination of the contract, Blockberry’s exclusive contract imposed excessive liability for damages.”


On the other hand Blockberry claimed: “Chuu was working under a different contract signed in April 2022, and as she was working with a self-established agency in advance of that contract, it already had no effect.”


Chuu won the initial trial.


Rejecting Blockberry’s claim, the court said: “Regarding Chuu’s exclusive contract, because it had an established duration, it is not apparent that the contract loses effect because of a change in agency.”


In addition they revealed that, “despite the plaintiff’s entertainment work from 2016 to September 2021 generating a net income of 860 million KRW, under Blockberry’s settlement distribution she was not paid any amount.”


They also pointed out that although “significant initial costs are incurred while discovering and developing new talent in the entertainment industry,” that “Blockberry’s profit distribution is unreasonable due to it being impossible for the plaintiff to receive payments from entertainment work regardless of how much revenue is generated unless profits exceeded 40% of revenue.”


As an example, the court cited the year 2019, in which LOONA made the most in net income since debut. At the time, LOONA recorded a revenue of 2.88 billion KRW with a profit of 1.11 billion KRW and as such, were not paid. (T/N: profits were 38% of revenue here)


In addition, the court added that “Blockberry also included expenses incurred in the plaintiff’s trainee period before debuting as LOONA,” and that “it is difficult for the defendant (Blockberry) to justify such an imbalance when they were quite likely to recover a significant portion of their initial costs.”


Afterwards, Blockberry’s representatives filed for an appeal, but as expected, the second trial maintained the first trial’s ruling, deeming the outcome to be justified.


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