On March 16, Soul Shop Entertainment revealed that they have filed a lawsuit against Megan Lee to prohibit her from promoting as a celebrity, adding that she made false claims against Soul Shop in order to create noise marketing. 

A representative of Soul Shop Entertainment sent a press release in regards to Megan Lee which reads, "Despite the fact that the court's decision for the lawsuit Megan Lee had filed against Soul Shop has not been determined, she made headlines with her promotions in America via Facebook on February 28 as if the court had come to a decision.

Megan Lee signed a five-year exclusive contract with Soul Shop Entertainment, but without the consent of the company, she started working with an American agency for her promotions in America." 

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The representative continued, "Even when the contract [with Soul Shop Entertainment] has not been terminated, Megan Lee released groundless and malicious press as well as speculative rumors, victimizing herself through noise marketing and releases of false statements. Through all this, she brought psychological distress to Kim Tae Woo's family and brought down the company's image." 

In regards to the statements that Megan Lee had released, Soul Shop Entertainment retaliated by stating that they were all false and that the agency had supported the young singer to the best of their abilities for the six months that Megan Lee had been signed under the agency.

Meanwhile, Megan Lee previously claimed that Kim Tae Woo's wife and mother-in-law's tyrannical actions and verbal abuse had led to the filing of the lawsuit. The two sides continued to reveal contradicting statements up to the second hearing. Since then, Megan Lee revealed that she will be starring in a Nickelodeon sitcom 'Make It Pop,' bringing attention to the lawsuit once again.