Hi hi, thanks for your message!

I myself was not familiar with what happened with SM and TVXQ, so I asked a good friend with better knowledge on the issue to provide a rundown: 

In the beginning, it was supposed to be all five TVXQ members suing their label SM Entertainment, but for some reason (a very touchy subject) Yunho and Changmin (TVXQ today) decided to withdraw and stay with the label. This happened around the end of 2009, their last performance as a group being around August ~ September. The actual lawsuit lasted for about 3 years because it just recently concluded. The lawsuit was mainly about the “slave contracts” SM forced them under. All of them had 13-year contracts, the conditions of which included the requirement to sell over 500K minimum for profits, SM’s ability to take profits from companies owned by their parents. (For example, Junsu’s dad has a pizza shop and Yoochun’s family owns a gelato place, from which SM was also making money from). SM decided to pull JYJ (Junsu, Yoochun, and Jaejoong) out of TVXQ indefinitely around 2011, also the same time their comeback was scheduled with “Keep Your Head Down”. Because of this lawsuit, AVEX (a strong partner company in Japan / connected to SM basically), also pulled JYJ’s contracts. At first they said they wanted to back JYJ up but they couldn’t because when AVEX’s artists produces anything in Korea, it is set up by SM and vise versa. The lawsuit caused a rift in relationships between the members. We don’t really know how it exactly started, but SM did not let them communicate with each other, even as they were filming their last music video together in Japan. From what we know, they don’t contact each other as of now; and SM has been cock-blocking JYJ ever since the beginning of the lawsuit. (SM is huge - they have a lot of influence in the industry, giving them the power to restrict JYJ from performing on stage, guest star on radio shows, etc. However, nowadays it does seem like they have more musical freedom - they write their own music; and have started starring in dramas, musicals, etc.)

JYJ is now under a company called C-Jes, but they have a different distributing company, unlike when they were under SM, who would take care of everything from production to distribution (basically what most companies continue to do today).

Credits to fobbiyo for this summary

**Much of this information are still unconfirmed speculations. Many thanks to suuzaaa for the heads up!

Many are using this incident as a pretext to help them understand and come up with possible ideas as to how the Block B situation might blow over, which is why many BBCs are also freaking out about the likeliness of them breaking up. The main similarities between these two lawsuits are 1) they’re both basically about the same thing - unfair distribution of profits and in a way, general maltreatment; and 2) that it’s the artists versus the company. As mentioned, it was originally all of the members of TVXQ who filed the injunction, until two of them dropped out. With Block B, all seven of them as a group decided to sue, unless one or several members suddenly change their minds (which I hope will not happen). The possibilities of disbandment would be higher if this were to take place. However, being a very small label Stardom does not have much (or any) power to manipulate potential discords within the group nor influence within the industry to set up barricades the same way SM did against JYJ. These are the major reasons why this Block B mess is incomparable to that of TVXQ/JYJ.

As far as we know, the decision to actually leave the company has not been stated. Up until now all that Block B has requested were financial reparations and a nullification of their current contract, which suggests the possibility of issuing them new contracts under Stardom. That’s merely looking at what’s on paper though, because based on the fact both parties have essentially called each other liars, the chances of reviving this business relationship seem very bleak. Moreover, the tone of the statement Block B just released leads me to think they’re no longer willing to stick around under Stardom despite any of the latter’s effort to patch things up. Like they said, they cannot trust Stardom anymore; and in allowing ourselves to think a bit ahead, the most we ought to prepare for is Block B changing labels and even their name (which would then be a situation similar to that of Shinhwa, who eventually left SM after having fought with them over the ownership of their group name (credit to fobbiyo once again for providing this information).