What: Lawsuit in between TVXQ (Asia popular Korea Boy Group) and their

agency-SM Entertainment

Who: 3 TVXQ members , Hero Kim Jae Jong, Micky Park Yoo Chun, Xiah Kim
Jun Su

Where: Seoul, Korea

How: 3 members of TVXQ filed for an Exclusive Contract Validity Suspension

and Provisional Disposition Request against their agency SM Entertainment
on July 31st asking for their release from their exclusive contract. They also
filed for a Preservation of Evidence request so that they could calculate the
exact amount of their income.

The lawyers representing Micky, Hero, and Xiah said: the three members and
the lawyers have been discussing this for over 2 months. They tried to settle
this with SM Entertainment through negotiations behind closed doors, but
they broke down therefore the injunction. The contracts are for 13 years and
the profit splits are 80% to SM Entertainment and 20% to TVXQ (divided by 5
for each member).

3 members have co-operate with Chinese cosmetic company and launched a

new cosmetic line called CreBeau. While the 3 members start the cosmetic
investment business, the SME tried to put down their efforts.

According to the legal document filed by three members of the group ―

Micky, Xiah and Hero ― the agency prohibited their freedom as artists by
claiming that the group’s and members’ activities belonged to the agency,
requiring them to follow the agency’s demands to appear at certain
performances and broadcasts, and requiring them to stay under the
agency’s wing for 13 years.

The agency SME had assigned lawyer to deal with this lawsuit. SME had
made a refutation on the claim and stated "Right now the profits are split
DBSK 40%, SM 60%. From the 27.4 billion won, 10.1 billion won (almost 9
million USD) goes to DBSK and 16.4 billion won (a bit more than 13 million
USD) goes to SME." Furthermore, it was mentioned that for overseas
activities, DBSK earned 70% of the profits while SME made 30%. This
included all events, festivities, and commercials.
SME also explained the reasoning behind the 13 year contract with DBSK.
They stated "We were taking overseas activities into consideration when we
were making the contract. We were thinking about 3~4 years in Korea, 3~4
years in Japan, and 3~4 years in China."

http://www.allkpop.com/index.php/full_story/tvxqs_official_press_conference/

Result: the court had issued a ruling that SME cannot interfere with the
individual activities of the three members of TVXQ: Hero Jae jong, Micky Yoo
chun and Xiah Jun su.

In response, SM Entertainment has revealed an appeal on the ruling. SME

was held an official press conference to disclose the truth and their position
regarding this matter, which was never revealed to the media previously.

The press conference statement:

http://www.allkpop.com/index.php/full_story/ceo_of_sm_calls_the_legal_actio
ns_a_fraud/

Another 2 members and their fathers were stand out and revealed the
support to the SME.

2/11 – the 3 members also held a phone interview with Sports Seoul to share
their feeling about the SME press conference.

In the press conference, SM Entertainment said that the root cause of all this
trouble was the investment into the Chinese cosmetic company. During the
phone interview with Sports Seoul, the trio of Jae jong, Jun su, and Yoo chun
stated that they watched the press conference together. They had issues
that SM Entertainment stated the root cause was with the investment into
the cosmetic company. They state that this cosmetic issue has nothing to do
with the suspension of exclusive contract as their activities as TVXQ are
more important than a cosmetic company. They also stated that they pulled
out of the cosmetic company to avoid controversy. They did admit that the
cosmetic company controversy played some part into their decision for the
suspension of the exclusive contract but emphasized once again that they
pulled out of the company.

Therefore, SME has offered a new contract policy to the 3 members, 3 of

them need to make decision by 12/11

Unfortunately till today, the 3 members who took the lawsuit against SME
were no response toward the offer. They are planning their own project.