FIFTY FIFTY at Legal Crossroads: Alleged Contract Breach and $70 Million Investment Drama
"Miracle of the Medium-Sized Idol" girl group, FIFTY FIFTY, is caught in a tense legal battle with their agency Attrakt, accusing them of a loss of trust.
On the 5th at 4:30 p.m., the first trial related to the application for suspension of the exclusive contract brought forward by the four members (Saena, Keena, Aran, Sio) of FIFTY FIFTY against Attract (CEO Jeon Hong-Jun) was held at the Seoul Central District Court in Seocho-gu, Seoul. Neither the members of FIFTY FIFTY nor the CEO and other officials from Attract attended the trial.
Last month on the 19th, the members' legal representative, Attorney Yu Young-Seok from Barun Law Firm, submitted an application to suspend the effect of their exclusive contract to the Seoul Central District Court, alleging that Attrakt had violated the contract and caused a breakdown in trust.
"Lost Trust due to Obscure Album and Music Revenue Settlement" VS "Missing Settlement was a Mistake by The Givers"
At the trial, FIFTY FIFTY highlighted three reasons for seeking to terminate their exclusive contract: failure to provide accurate settlement data, breach of duty to maintain the members' physical and mental health, and insufficient provision of personnel and material resources required for their entertainment activities.
They emphasized that the opaque provision of settlement data was a significant factor in the breakdown of trust between the members and the agency. The legal representative of FIFTY FIFTY raised questions about the fact that Attrakt's CEO, Jeon Hong-Jun, claimed to have secured an advance payment distribution contract of 90 billion KRW with Interpark, to be directed to StarCrewENT - the company with which the members signed their original contracts as trainees. Out of this, 60 billion KRW was used for album investment, but the earnings from the album sales are being paid to StarCrewENT.
The lawyer questioned, "Why contract with a random company? A prepayment distribution contract for 90 billion KRW should have been concluded between Interpark and Attract". He further added, "While the debtor is StarCrewENT, the structure is changing to burden FIFTY FIFTY," raising doubts about the usage of over 60 billion KRW for the benefit of the creditors (FIFTY FIFTY).
Moreover, they claimed that "the members of FIFTY FIFTY have never been informed about the structure of the advance payment distribution contract between Interpark and StarCrewENT, nor has their consent been obtained," which led to a loss of trust in Attrakt.
The members' legal representatives also accused CEO Jeon Hong-Jun of embezzlement and announced plans to press criminal charges. They claimed that "since last December, when the advance payment was made by the music distributor, the income from the album and music source was virtually omitted in the settlement data, as it was recorded as 0 KRW until April". They added, "The members never agreed to this transaction structure, and considering that the former representative committed embezzlement through this, we are considering pressing criminal charges."
In response, Attrakt's legal representative argued, "There is a significant misunderstanding about the transaction structure, or it is being intentionally distorted." They maintained that the members had initially signed an exclusive contract with StarCrewENT, and the transaction was based on a business transfer agreement between Attrakt and StarCrewENT, thus there was no issue with the transaction structure.
Attrakt stated, "Talking about embezzlement by the representative regarding the agreed transaction structure is an excessive imagination". They asserted that "the omission of profits was due to a time difference and a mistake by the person in charge at The Givers. We have corrected this and submitted it within the deadline required by the members."
The court asked Attrakt to specify the reasons for the delayed provision of the settlement details and the process of settling music revenue made between StarCrewENT. The court will make a decision after receiving all the data from both parties by the 26th of this month.
Broken Trust" VS "Desire for Agreement": Tense Dispute Continues
On the day of the hearing, both sides continued with a tense face-off. In their final statements, Attrakt's side repeatedly expressed their suspicion regarding the forces behind the members of FIFTY FIFTY, while the members' representatives retorted that these claims obscure the true issues and stated, "Conflicts of external forces should not hinder the legitimate rights of celebrities."
After the trial, lawyers from both sides met with reporters to reiterate their positions. Firstly, the attorney for Attract expressed regret saying, "It's extremely sad to see young artists suffering mentally due to the mistakes of adults," and "The artists themselves are not at fault. It's sad to think that they're making wrong judgments because of the greedy and incorrect statements of adults."
The attorney also stated a desire for a smooth consultation with the artists over winning a provisional disposition. "Attract believes and has evidence that there are clear forces manipulating things from behind. We will scrutinize this through separate lawsuits and legal procedures and hold them accountable," emphasized the attorney.
He went on to raise concerns about the interference of external forces, stating, "After investing a huge amount of 8 billion won, including all the assets of the small and medium-sized agency and the small amount that the mother of the CEO, Jun Hong-joon, had saved, we have grown the group. If external forces intervene and take this away, it's distressing to think how any small to medium-sized agency in the K-pop market will be able to risk investing significant funds in the future development of artists."
Insisting that ultimately, it's the artists who suffer, the attorney said, "I'm looking at this case with a mother's heart. There are many comments blaming the artists themselves, and I urge restraint in criticism and request comments that can support their reunion, considering their future."
Regarding the members' allegations of opaque settlements, the lawyer explained, "The omission in the settlement process was due to a mistake by the subcontractor (The Givers)," and "We have recently disclosed all the money and provided the settlement data. Although we acknowledge the mistake, we have fulfilled all obligations recently, so this does not constitute grounds for contract termination."
The attorney also mentioned attempts to reach an agreement with the members but claimed they received no response. "Attrakt executives even visited the members' parents' homes, but were consistently unable to make contact. We still desire an agreement. The more this case progresses, the more the artists suffer," he emphasized repeatedly.
On the other hand, FIFTY FIFTY's lawyers countered, "The members aren't asking for money right away. They're simply asking for proper provision of settlement data as per their contractual rights." They appealed for restraint in criticism, saying, "The members, who are still young, are receiving excessive criticism due to various misunderstandings and assumptions. Please refrain from groundless criticism until the result comes out."
Regarding rumors of Warner Music Korea's recruitment, FIFTY FIFTY's trademark application, and related issues, the attorneys replied, "We don't know." Regarding some members' health conditions, they said, "They are still suffering from after-effects."
Conflict Heading Towards a 'Chicken Game', What is FIFTY FIFTY's Future?
FIFTY FIFTY, a group from Attrakt, a small and medium-sized record planning company established in 2021, gained attention by setting a new record as the fastest entry into the US Billboard 'Hot 100' with their song 'Cupid' on April 1st. The song ranked 24th on the 'Hot 100' on the 1st, entering for 14 consecutive weeks and peaking at 2nd place. They also succeeded in entering the main albums chart, 'Billboard 200'.
However, their success story was marred by controversy when the members claimed their right to know about their earnings, leading to a conflict with their agency. The members requested a provisional disposition for the suspension of their exclusive contract, which led to legal proceedings. This lawsuit, which began in March, has been continuing for over four months, adding to the complexity of the situation.
The relationship between Attrakt and the members of FIFTY FIFTY seems to have broken down beyond repair. The ongoing dispute and legal battle have not only strained their relationship but also cast a cloud over the future of the group. The more time passes, the more uncertain FIFTY FIFTY's future becomes, and this uncertainty is causing considerable stress to the members and their fans.
Amidst this turmoil, the fans are showing their unwavering support for the group, hoping that the dispute can be resolved soon, and FIFTY FIFTY can return to making music and performing. Some fans have launched a social media campaign, using the hashtag #SupportFIFTYFIFTY, urging the public to refrain from speculating and spreading rumors about the situation until the legal proceedings are concluded.
In this 'Chicken Game' like situation, where both sides seem unwilling to back down, the future of FIFTY FIFTY hangs in the balance. As this saga continues, the music industry and fans alike eagerly await the resolution, hoping that no matter the outcome, the members can find some closure and peace in their careers and personal lives.
The next hearing in the case is scheduled for later this month. Both sides will have a chance to present their arguments before the court. It is expected that the decision of the court will greatly affect the future direction of the group and the landscape of the K-pop industry. All eyes are now on the legal battle between Attract and the members of FIFTY FIFTY, a battle that is not only about a contractual dispute but also about the rights and responsibilities of artists and agencies in the music industry.
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