[Update] Kang Daniel & LM Entertainment go back and forth regarding contract dispute

Kang Daniel is currently in the middle of taking LM Entertainment to court in order to get his contract with them terminated. The justification for this primarily revolved around LME allegedly selling Daniel’s rights to a third party without his consent.

Yesterday, LME responded to Daniel’s complaints, denying wrongdoing and claiming Daniel’s side lied and hasn’t been discussing in good faith.

1. Hello. This is lawyer Kim Mun Hee from the law firm Jipyong, representing Kang Daniel’s agency LM Entertainment. I am relaying LM Entertainment’s official statement on the recent application for an injunction and subsequent suspension of his exclusive contract by Kang Daniel.
2. The exclusive contract between Kang Daniel and LM Entertainment is a standard exclusive contract provided by the Fair Trade Commission, and LM Entertainment has paid the signing bonus agreed to in the contract. Despite this, before his contract even went into effect, [Kang Daniel] sent us a notice through a representative vaguely saying that the contract was unfair, requesting that the contract be changed without giving us any specifics. Afterwards, we had four negotiation meetings with a CEO Won, who had declared himself a mediator, but we eventually received a notice from various lawyers with false truths, including a claim that [Kang Daniel] never received the signing bonus. Moreover, this latest injunction from Kang Daniel’s side claims that LM Entertainment breached contract terms by signing over rights to a third party, but the contract in question is simply a contract in which LM Entertainment receives an investment from Kang Daniel’s old agency, MMO Entertainment, in order to best support Kang Daniel in his entertainment activities. LM Entertainment has never signed exclusive rights over to another party and holds all rights, including for album planning, fan meetings, concerts, and other performance contracts, merchandise businesses, casting, and management. LM Entertainment exclusively exercises these rights, with no participation from anyone.
3. LM Entertainment has refrained from taking any immediate action in the interest of reaching a mutual agreement, and has sat down several times with the various representatives of Kang Daniel in order to dispel misunderstandings and in a continued effort to reach a point of compromise. However, Kang Daniel’s side has changed representatives as well as their stance on issues several times, eventually ignoring what was discussed in our meetings and filing for an injunction and termination of his contract. The situation is such that LM Entertainment has no choice but to carefully review the contents of the injunction request and to take legal action.
4. LM Entertainment had been preparing so that Kang Daniel would immediately be able to jump into solo promotions once his contract went into effect, and we regret having to relay this kind of news to Kang Daniel’s fans and to the public. Though we have no choice but to move forward with the legal dispute, LM Entertainment will, with an open mind, continue its efforts towards regaining trust and reaching a compromise with Kang Daniel as well as working on getting Kang Daniel back to his activities as soon as possible. Thank you.

Hours later, Daniel’s side responded, refuting LME’s statement.

Hello, this is lawyer Yeom Yong Pyo from the law firm Yulchon, who is carrying out legal affairs for singer Kang Daniel. First, Kang Daniel has repeatedly wished to deliver his apology to fans who cherish him and the Korean public for the ongoing legal battle [with his agency]. In order to help the understanding of people who are interested in the case, Yulchon will tell the truth on behalf of Kang Daniel, with a focus on the application we filed to court requesting for the suspension of [the singer’s] exclusive contract [with LM Entertainment]. The key point of submitting the application to the court for an injunction [against LM Entertainment] for the suspension of [Kang Daniel’s] exclusive contract is whether or not [the agency] sold various rights written in the exclusive contract with Kang Daniel to a third party without Kang Daniel’s consent. Kang Daniel signed an exclusive contract with LM Entertainment on February 2, 2018, a year before the contract went into effect on February 2, 2019. However, on January 28, 2019, which is before the exclusive contract went into effect, LM Entertainment signed a joint business contract that sells [Kang Daniel’s exclusive contract rights] including the content creation and management rights of Kang Daniel to a third party. The context [of the joint business contract] mainly involves around the point that “during the five years of the exclusive contract, the core rights of the exclusive contract, including the rights to produce and distribute musical content, concert and international business rights, and negotiation rights regarding [Kang Daniel’s] activities in the entertainment industry, will be exclusively given to a third party.” We were also able to confirm that in exchange [for selling the rights], LM Entertainment received a down payment from the third party that is triple the amount the agency paid Kang Daniel for signing the exclusive contract. However, Kang Daniel did not receive any explanation in advance regarding the signing and the context of the joint business contract nor did he give his consent. Kang Daniel later found out that LM Entertainment, whom he trusted, signed a joint business contract with a third party without his consent, and the legal battle began when the singer requested the agency to make corrections regarding this. In order to smoothly solve the conflicts, Kang Daniel made numerous requests to LM Entertainment for corrections of the illegal and unfair events that are stated above, but he failed to hear back a positive response and decided to appeal for the court’s decision. Yulchon is expecting the truth of this case to be revealed clearly through questioning of the contract suspension, and Kang Daniel is currently expressing his desire for reasonable results to come out so that he can return to the arms of fans as quickly as possible.

The third-party issue is obviously the crux of the problem, though it’s hard to know who is telling the truth based on the statements given and without being able to see the documents ourselves.

If LME sold Daniel’s rights to another company for profit, it’s hard to blame the guy for filing suit, and for now it’s also hard not to side against a company that just recently filed to trademark the legal name of Yoon Ji Sung.

Update

LME have now responded again in a statement.

1. Hello. This is lawyer Kim Mun Hee from the law firm Jipyong, representing Kang Daniel’s agency LM Entertainment. We hereby deliver the following statements as LM Entertainment’s official response to the claims made by Kang Daniel regarding the joint business contract.
2. Kang Daniel and his representative are distorting the true nature of the joint business contract by purposely omitting the fact that LM Entertainment holds and can independently exercise all the rights of the exclusive contract [between the singer and the agency] and only extracting and revealing the parts that are favorable to them. We only see this action being done with the purpose of provoking fans and forming public opinions that they can use as advantage, which will have unfair effects on the court’s decision. Moreover, the joint business contract Kang Daniel obtained was through illegal methods, and LM Entertainment will be taking legal action regarding this.
3. The joint business contract that has become the key point of the legal battle is an ordinary business contract that allows [LM Entertainment] to receive investment from third parties to carry out business of album production, concerts, and more. In exchange, the third parties are granted temporary rights such as album production and distribution rights and concert business rights. LM Entertainment still holds the rights of their artists without transferring them [to third parties]. Furthermore, the investment LM Entertainment received from MMO Entertainment was actually used for the entertainment activities of Kang Daniel and Yoon Ji Sung, another artist under the same label. All of this will be revealed through a trial at court.
4. Kang Daniel and his representative also argue that the legal battle started when the singer belatedly found out about the joint business contract and made requests to correct the situation, but this is not true. When Kang Daniel’s representative Mr. Seol first requested to make changes in the exclusive contract through a notice on February 1, 2019, Kang Daniel’s side was already aware of the joint business contract. However, they did not raise any question regarding the contract, and they continued to only negotiate to make changes in the exclusive contract. [Kang Daniel] suddenly brought up the joint business contract through a notice via his lawyers on March 4, 2019, arguing that [LM Entertainment] did not pay [Kang Daniel] for signing [the exclusive contract]. This is a claim made only with the intention of terminating the exclusive contract. LM Entertainment even expressed willingness to terminate the joint business contract [with MMO Entertainment] to Kang Daniel if Kang Daniel did not wish to work together with MMO Entertainment. However, different from what had been argued until now, Kang Daniel’s side demanded to terminate the exclusive contract and submitted an injunction [against LM Entertainment] for the suspension of the exclusive contract. We deliver our regret to fans and the public for allowing the situation to come this far, and we will try our best to solve the conflicts in a timely manner.

Finding it difficult to have any kind of rational take on this besides waiting to see how it plays out, mainly due to the level of what we don’t know.

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