SEE ALSO: Megan Lee files lawsuit requesting nullification of contract + Soul Shop Entertainment responds

"Since February 2014, Kim Tae Woo's wife Kim Ae Ri and mother-in-law Ms. Kim were appointed as managing director (MD) and chief operating officer (COO), respectively, and fired the entire original management team that worked with the company for 10 years. This created a situation in which Megan Lee couldn't make a proper debut but her debut was pushed ahead despite that. Afterwards starting last March, the employees changed multiple times due to director Kim Ae Ri and the COO, making it difficult to carry out schedules and communication.

After the replacement of the management team, the expense and income statements that should be reviewed by the agency celebrities every month were not released not even once until August. Not only did the clause state that [Soul Shop Entertainment] has to release the financial statement including the expense report, [Megan Lee's] parents were pressured into signing the statement by being told that they should not behave like a top star's parent considering that she is a rookie and trust the agency no matter what. The agency also threatened them to not raise any objections afterwards. Even if the expense was greater than the income, the financial statement must be kept transparent [according to the contract]. However, director Kim Ae Ri wasn't transparent at all. The agreement made 2 weeks before [Megan Lee's] debut of the 50:50 split in profits from physical and digital album sales was thought to be unfair by [Kim Tae Woo's] mother-in-law Ms. Kim who wanted [Megan Lee] to sign an annex agreement and pressured her, saying that if she doesn't sign it, there will be trouble in carrying out her debut. [Megan Lee] said that she would sign it if needed because she definitely wanted to make her debut and expressed her hope that they do their best [to support] her."

Upon receiving a musical contract that was signed without her consent mid-October, [Megan Lee] decided that she was unable to continue with Soul Shop. Even up until the final meeting with her agency on November 4, [Megan Lee] could not come to an understanding with the management team so after receiving legal counsel multiple times, she hired a lawyer and filed the lawsuit on November 10."

According to the singer's side's statement, Kim Ae Ri was supportive of Megan's advancement into the U.S. market at first and approved her U.S. auditions on February 27, March 4, July 16, and August 20. The agency even sent her audition tape for a casting in an American drama. But afterwards, she received a notification of the cancellation of her U.S. activities, stating, "Soul Shop cannot legally cover for Megan Lee so we won't send you to the final audition." According to Megan Lee's rep, Kim Ae Ri was involved in the making of this decision as well as in the signing of the contract for 'All Shook Up' without her consent.

Megan's side also revealed that Kim Ae Ri used the car, which was used to take Megan Lee to her schedules, for shopping and personal use. Kim Ae Ri and her mother are also being accused of not taking care of the employees and management who worked for Megan Lee and only giving unfair treatment and threats. In that process, Megan Lee became a victim of verbal abuse and even had to start receiving psychological treatment.

Her reps also stated, "Director Kim Ae Ri and the COO attacked Megan Lee and her mother's character and alienated Megan Lee from the staff. They made her unable to leave the agency. Prior to her practice for her musical, the only schedules she had were special appearances with Kim Tae Woo."

"They made all types of insulting remarks, saying that there are artists who get hit and patiently hold it in for years in C-level agencies these days until they get big, so why is she complaining. Megan Lee refused to eat and drink in shock for a while and didn't leave her house, unable to live with a fake smile... Megan Lee always thinks gratefully of her PD Kim Tae Woo who she trusted and followed for 3 years. But due to Kim Tae Woo's wife Kim Ae Ri's tyranny, she is unable to continue with the contract and requested a nullification of contract."

The first questioning with the lawyers of both sides was held on the 26th, and the 2nd questioning will be held on December 17.