SM Entertainment files lawsuit against EXO-CBX demanding payment fulfillment

SM Entertainment files lawsuit against EXO-CBX demanding payment fulfillment

SM Entertainment Files Lawsuit Against EXO-CBX Demanding Payment Fulfillment

SM Entertainment has initiated legal action against EXO members Chen, Baekhyun, and Xiumin, collectively known as EXO-CBX. The entertainment giant filed a lawsuit with the Seoul Eastern District Court on June 12, demanding that the trio fulfill the payment obligations outlined in their previously settled contract.

A representative from SM Entertainment confirmed the lawsuit on June 13, stating, “It’s true that a lawsuit has been filed against CBX. The matter will be dealt with according to the law.”

Chen, Baekhyun, and Xiumin had renewed their contracts with SM Entertainment in December 2022. However, by June of the following year, the three members sought to terminate their contracts, citing unfair terms. A legal dispute ensued for about a month, culminating in a settlement. The agreement allowed the trio to continue promoting under SM Entertainment for EXO’s group activities while gaining freedom for their individual promotions under a new, independent label. As part of the settlement, 10% of all sales made by the new label would be paid to SM Entertainment.

In January of this year, Baekhyun established his agency, INB100, listing himself, Chen, and Xiumin as the label’s artists. On June 10, CBX’s side held a press conference to express their grievances over the 10% payment requirement outlined in their settlement contract. They also accused SM Entertainment of failing to pay 5.5% of all earnings from album sales and streaming, another clause in the settlement contract.

SM Entertainment responded to these claims, stating, “The receipt of 10% of all sales by the independent labels was a standard set by the court during SM Entertainment’s previous lawsuit against the Chinese members of EXO, and therefore it is considered a reasonable payment based on precedents.”

SM Entertainment has filed a civil suit against Chen, Baekhyun, and Xiumin, demanding they pay the 10% royalty fee that the members have reportedly been evading for two months. The agency stated, “CBX’s nonsensical actions cannot be tolerated anymore.”

According to SM Entertainment, the trio has been evading the 10% royalty fee agreed upon in a contract signed in June last year after a month-long negotiation between the two parties. INB100, the agency managing the three members’ activities outside the EXO group, sent a formal letter of complaint to SM Entertainment on April 5, denying the obligation to pay the 10% fee.

INB100 claimed that SM Entertainment had promised a 5.5% rate in its distribution deal with Kakao, with INB100 agreeing to the 10% royalty in exchange. However, SM Entertainment allegedly failed to deliver on its end of the deal, leading INB100 to argue that they have no obligation to pay the royalty.

SM Entertainment’s lawsuit is officially termed a “demand of performance,” requesting that the party act upon the clause in the signed contract. Industry insiders suggest that a suit demanding compensation is also likely to follow.

As of Thursday afternoon, INB100 had not commented on the lawsuit.

Despite the ongoing dispute, both sides have maintained that the trio will continue their activities as members of EXO. SM Entertainment confirmed that EXO is planning to release new music, adding that “there has been no further discussion about changes to the plan.”

In a recent interview, Baekhyun hinted at new EXO music, saying, “During winter, there will be something that’s coming up.” The boyband’s last release was the album ‘Exist,’ which came out in July 2023.

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