Eww, those have got to be fake...
But in regards to the latest development: Lee Soo Man figured that there was no way out of the hole he's in other than to resign. SM is no longer a reputable company. Everyone knows this now - even him - so avex probably thought now was a good a time as any to get out as well.
All this means is that avex will no longer be in charge of releasing merchandise from artists under the SM label in Japan and vise-versa. People have got to start thinking of TVXQ and Tohoshinki as separate groups. If you take away the fact that the boys are also TVXQ, this development wouldn't really effect Tohoshinki at all. All avex would really have to do is find another Korean record label, like JYP, to sell their stuff overseas instead. But it just so happens that SM is also TVXQ's record label, which makes things a bit tricky.
This is why avex needs a Korean label like they have in China.
But with that being said, hopefully now that Lee Soo Man has resigned, things can start getting resolved with our boys. I think avex sees this too, which brings me to my above point: they would be stupid to stay with SM, even if/when things do get resolved. Once that happens, they can easily jump to JYP or whatever label they choose along with avex to handle things in Korea.
There's also the option of just forgetting Korea all together and solely concentrating on Japan, but I don't think the boys have the heart to do that. Nonetheless, this is an AWESOME turn of events in regards to the lawsuit, so let's just wait and see what happens.