A Delaware court has ruled against Prince’s family members after they tried to oust two executives from Prince Legacy LLC, one of the companies that manages the late musician’s estate. The Court Of Chancery deemed the family’s attempt to amend the company’s operating agreement without involving L Londell McMillan and Charles Spicer invalid.
McMillan and Spicer disagreed with the family on how that agreement should be interpreted. Chancellor Kathaleen St J McCormick ruled that McMillan and Spicer’s interpretation of the agreement was “the only reasonable one”, describing it as “unambiguous”. She added that accepting the family members’ interpretation of the rules would lead to “absurd results”.
The dispute hinged on whether Prince’s family members could call a meeting to amend the operating agreement without involving McMillan and Spicer, who run the business. Last year
such a meeting was held and the agreement was amended to remove McMillan and Spicer as managing members of the company.
McMillan and Spicer, who advised the estate following Prince’s death in 2016, established Prince Legacy LLC with several family members, including the musician’s half-sisters Sharon and Norrine Nelson, niece Breanna Nelson and nephew Allen Nelson. The executives and family members all became shareholders, with the company being run subject to the terms of the operating agreement.
Other family members formed a separate company, Prince Oat Holdings, in partnership with Primary Wave. After much legal wrangling, the estate’s assets were ultimately split between the two businesses.
Despite McMillan and Spice’s claims of successfully managing the assets of the estate that sat within Prince Legacy LLC, tensions began to build between the executives and the family member shareholders.
Those tensions were partly because McMillan and Spicer rejected “unreasonable demands” that had been made by Sharon Nelson, said their lawsuit, but also because some family members wanted to change the rules regarding the sale of their shares so that they could do a deal with Primary Wave.
Things came to a head last year with the family members’ unsuccessful attempt to exclude the two executives, leading to McMillan and Spicer filing their lawsuit earlier this year.
