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SM Entertainment heavily seizes assets of EXO's CBX

[비즈한국] It has been confirmed that SM Entertainment recently seized assets belonging to EXO members Chen, Baekhyun, and Xiumin (CBX). The move is intended to secure a claim equivalent to 10% of their personal activity revenue. Previously, in 2023, CBX notified SM of the termination of their exclusive contracts, citing issues such as unfair contract periods. The following year, they agreed to operate under a separate agency on the condition that they pay 10% of their personal activity revenue to SM. However, the conflict escalated into a legal battle after CBX claimed that SM failed to fulfill the agreement and refused to pay the royalties.

According to Bizhankook's coverage, SM Entertainment seized assets of EXO members Chen, Baekhyun, and Xiumin (CBX) over two days, on the 9th and 10th. The seized assets include Chen's housing lease deposit claim, Baekhyun's apartment in Acheon-dong, Guri-si, Gyeonggi-do, and Xiumin's apartment in Hannam-dong, Yongsan-gu, Seoul. Baekhyun's 142㎡ apartment in Acheon-dong was registered in October 2023, and Xiumin's 166㎡ apartment in Hannam-dong only had its ownership transfer registered on the 9th of last month.

The total amount claimed by SM Entertainment against CBX in this provisional seizure is 2.6 billion won (300 million, 1.6 billion, and 700 million won respectively). The purpose is to secure a claim equivalent to 10% of personal activity revenue generated under the agreement signed by both parties in June 2023. Provisional seizure is a measure to prevent the debtor from disposing of assets to ensure the debt can be collected. It is typically used when there is a risk that the debtor might hide or dissipate their assets.

The dispute began in June 2023 when CBX notified SM Entertainment of the termination of their exclusive contracts. Their reasoning was that they had not been provided with proper settlement statements and that the contract periods were unfairly long. As the situation escalated rapidly, the two parties reached a dramatic agreement later that same month. It was decided that group activities for EXO would continue under SM, while personal activities would be managed by their separate agency, INB100, with 10% of personal activity revenue paid to SM.

The dispute reignited in June of the following year when CBX claimed that SM had failed to fulfill the agreement. They argued that because SM did not uphold the promise to guarantee a 5.5% distribution fee rate for music and albums for their independent agency, INB100, they could not pay the 10% royalty on personal activity revenue. In response, SM filed a lawsuit against the three members of CBX that same month for the performance of their exclusive contracts, continuing the legal conflict. CBX accused SM executives of fraud, claiming they were deceived about the 5.5% fee guarantee. This case was later dismissed due to insufficient evidence.