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The first pleading for Happyface Entertainment's case against YG Entertainment took place at Seoul Central District Court on October 31. The case was filed by the former seeking compensation for damages against YG Entertainment for non-fulfilment of contract. The pleading was attended by both parties laying their arguments before the presiding judge.

Earlier in June, Happyface Entertainment filed a lawsuit against YG for allegedly failing to sign JTBC's survival audition program "MIXNINE".

 The lawsuit claimed 10,000,000 KRW (approx US$9,000) in damages from YG Entertainment. Woo Jin Young, a trainee with Happyface Entertainment, appeared on JTBC's "MIXNINE" and won hearts for his performances and stayed ahead of other contestants.

As per the promise of the show, the winning top 9 were to make a debut with the promotion expected to be handled by YG Entertainment for a duration of four months.

The legal representative of YG claimed that "If MIXNINE was a successful program, a thing such as cancellation of debut would not have happened". He further stated that the company suffered huge losses due to the non-popularity of the show.

 The representative further added that "Releasing the album for the final members was not a mandatory clause in the contract. Since all the members' agencies were different, YG had requested for the full authority of managing all the members for four months".

The argument claimed that YG Entertainment started preparing for the debut but realized that they could not create a successful album within four months with a new team. Instead, YG had suggested to the agencies that they have a three-year extended contract as the preparatory period.

The representative laid before the judge that various agencies had different views on the time frame required to launch a successful group. According to the contract, all nine members had to participate ultimately breaking the negotiations.

Happyface Entertainment claimed that YG ignored the finalists and kept them in the dark. The final outcome of the lawsuit is still pending.