TVXQ vs SM Entertainment. TVXQ is really breaking up?

Remember last month about the "supposed false rumor" that TVXQ / DBSK / Tohoshinki was breaking up? Well, it seems that information may have actually been true. According to this source, it states that on July 31st, 3 TVXQ Members, specifically Micky Yoochun, Jaejoong, and Xiah Junsu filed an injunction against SM Entertainment in the Seoul Central District Court to remove the "non exclusivity clause" in their contract.

Yunho and Changmin have decided not to file an injunction. Basically in a nutshell, the three of them supposedly had meetings with a Chinese cosmetic company and launched a new cosmetic line called CreBeau. They invested some of their own money and also in turn received some lucrative gifts from the Chinese company as an incentive package for signing up and investing. Some of the rumored gifts includes Micky's Audi R8 and the townhouse for Xiah's parents.


SM Entertainment supposedly got wind of this news and because SM Entertainment has the "exclusivity clause" in their contract, SM Entertainment tried to prevent this from happening. Unhappy with this, and already unhappy that they feel they're being underpaid profit-wise from album sales, you can understand why they're trying to terminate the "exclusivity clause" in their contracts. There's also rumors that if a favorable agreement isn't met, the three will be leaving the group for good.

SM Entertainment via phone to one of the Korean news media outlets stated that they are aware of the situation, the board of directors is having an emergency meeting and are discussing what to do. They'll have an official statement soon.

Wow, this is crazy. I wonder how this will effect their arrangements with AVEX in Japan? This isn't new for SM Entertainment as they had their problems with H.O.T. in the past. I just hope that this doesn't result in an actual disbandment and that everyone can come to peace, for themselves and most importantly their fans. TVXQ is a very talented group and they shouldn't break up, they have a great thing going.

Update from the lawyers representing Micky, Jaejoong, and Xiah: The three 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). The three are prepared to go to court and file a lawsuit if the exclusivity clause isn't dropped. Sources: Source 1, Source 2, Source 3