Courts Hear Arguments From Kang Daniel And LM Entertainment In Appeal Hearing

The Seoul Central District Courts held a hearing on June 26 for LM Entertainment’s appeal for the injunction case between the agency and Kang Daniel.

On March 19, Kang Daniel filed a request to suspend his exclusive contract with LM Entertainment, stating that they had sold his exclusive contract rights to a third party. The agency claimed that Kang Daniel was already aware of the nature of his contract, and the contract stated that no businesses could be pursued without the consent of both Kang Daniel and the head of LM Entertainment. The courts ruled in favor of Kang Daniel’s request in May, and the agency immediately filed an appeal.

The focus of this appeal is on the definition of a joint enterprise contract and whether or not it involves the transferring of rights to a third party.

In the questioning that was held on June 26, LM Entertainment’s legal representative stated, “Though there was language in the contract that may make the joint enterprise contract appear to be a transfer of rights, the overall content of the contract was closer to an investment.” They continued to say, “Kang Daniel’s side is claiming to the courts and the press that LM Entertainment has sold our artist’s rights to a large agency. If his request is accepted, it will be impossible for us to recover the lost trust that we have built up over many years in the entertainment industry.”

They stated, “Though it may be true that there are clauses in Section 3 that appear as though they transfer rights [of Kang Daniel to MMO Entertainment], Clause 5 of Section 3 states that MMO Entertainment is required to discuss with LM Entertainment before any actions pertaining to the exercising rights,” and “Before any such acts, MMO Entertainment was required to receive our approval in advance, so the actual rights still remained with us, and therefore cannot be seen as a transferral of his rights.”

LM Entertainment’s representative stated, “Even if we do win this appeal, the agency has already suffered severe damages monetarily and in the trust people put in the agency,” and “Kang Daniel has already begun pursuing activities independently. Therefore, if our appeal is accepted, we will look into working with Kang Daniel’s new label KONNECT Entertainment.”

However, Kang Daniel’s representatives rejected this offer and said, “Kang Daniel is already pursuing independent activities. The trust in the relationship has already been shattered, which is why the independent label was formed, so we have no plans to maintain a contract with the agency. LM Entertainment claims that they are willing to provide support, but that is simply their opinion.”

Regarding LM Entertainment’s stance regarding the joint enterprise contract with MMO Entertainment, Kang Daniel’s side stated, “What they are stating is simply another explanation of the same fundamental issue [that Kang Daniel’s rights were transferred to a third party],” and “Even if rights were partially, not fully, transferred, that is still a violation of an exclusive contract. What we are talking about here is that ‘most of his rights’ were transferred.”

They also pushed back at LM Entertainment’s claims of damages as they said, “The profits Kang Daniel stands to lose by maintaining his contract with LM Entertainment is also immense. It isn’t just one side that incurs damages in this dispute.”

The questioning was closed by the judge announcing that a final verdict will be made on the appeal on July 10.

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