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Prince estate court advised to reclaim advisors’ commission on failed Universal deal

By | Published on Monday 18 December 2017


An investigation into the failed record deal agreed between the Prince estate and Universal Music has concluded that the estate’s former advisors – Charles Koppelman and L Londell McMillan – should repay the commissions they earned from the transaction. The two men received payment for their part in brokering the deal but, investigators have concluded, they failed to provide “anything of value that would entitle [them] to a commission”.

As previously reported, a deal granting Universal access to a big chunk of the Prince recordings catalogue, along with his vault of unreleased music, was announced back in February this year. The $31 million deal also allowed Universal to pick up recordings currently controlled by Warner Music, as its smaller rival’s previous deals with Prince lapsed.

However, Universal quickly became concerned that all was not as it seemed and that it hadn’t actually got what it thought it paid for.

Both Universal and Warner felt that some tracks promised to the former were actually still under the control of the latter. In an attempt to clear up the confusion, Universal was given access to Warner’s most recent Prince contract to work it all out. Unfortunately, lawyers were unable to make head nor tail of that agreement – leaving what Universal had actually bought still in doubt. As a result, the deal was rescinded in July.

The deal was done under the watch of the Prince estate’s original administrator, the Bremer Trust. Always a temporary overseer, the financial management of the estate then transferred to a more permanent home at the bank Comercia in January. Koppelman and McMillan were dropped as official advisors to the estate at that point, although McMillan remains linked to some of Prince’s heirs. Former Lady Gaga manager Troy Carter then took over as the estate’s official music industry advisor.

Following the collapse of the Universal deal, the judge overseeing the estate appointed a special administrator to produce a report into whether or not Koppelman and McMillan should be allowed to keep the 10% commission they earned on the record deal. Submitted to the court last Friday, that report concludes that, no, they should not.

According to Billboard, said report notes that the Bremer Trust acted “prudently and reasonably” when hiring Koppelman and McMillan, and adds that the two men themselves had acted properly when hiring experts to advise on the various deals done on their watch. However, it notes that at no point during the deal making process with Universal did Koppelman and McMillan – or any of their advisors – look over the existing Warner agreement, despite having access to it.

Had they done this, says the report, “there would have been material questions raised concerning the scope of the rights granted to UMG in the UMG agreement in respect of the WB masters that required further investigation, analysis and diligence”.

Basically, the report implies, all the issues that arose after the deal was done would have been apparent beforehand, had anyone checked what Warner had been given control of in its 2014 deal, made while Prince was still alive.

The report recommends the estate reclaim fees paid to Koppelman and McMillan, as well as legal firm Stinson Leonard Street, on the grounds that “both have received something of value in the nature of an unjust action and are not entitled to it”.

The report adds that, under the circumstances: “It makes no sense to conclude that the estate has received anything of value that would entitle the advisors to a commission”. Those monies could be treated as damages relating to overpaid fees, it also states. Which is important, because that would give the court the power to order repayment.