The current dispute surrounding Prince’s estate primarily concerns the actions of Prince’s half-sister, Sharon Nelson, although Prince’s half-sister, Norrine Nelson, Prince’s niece, Breanna Nelson, and Prince’s nephew, Allen Nelson, also have been named as defendants in the lawsuit.
According to Rolling Stone, Sharon Nelson had hoped to co-manage Prince Legacy LLC with McMillan and Spicer, who founded the company. However, her siblings rejected this proposal. Ultimately, Sharon acquiesced, agreeing to allow McMillan and Spicer full management authority over the company.
As time went on, Sharon began to regret her decision to cede full management authority to the duo, so she gradually started to take on a managerial role. For example, Rolling Stone reports that she attempted, but failed, to replace the entire staff of Paisley Park Museum, Prince’s former home and recording studio, with a staff she had handpicked.
Later, she called several meetings, rounding up support from her siblings to execute an amendment to the terms of the LLC that effectively would oust McMillian and Spicer as managers of the company.
In response to this turn of events, McMillan and Spicer brought a lawsuit seeking to have the amendment that effectively cut them out of the business invalidated. In addition, the lawsuit was seeking a ruling that the defendants breached their covenant of good faith and fair dealing, as well as the terms of the LLC agreement, by attempting to remove them as managers of the LLC.
A covenant of good faith and fair dealing generally is implied in most contracts, even if not explicitly stated. It ensures the parties will act justly and honestly with one another so the purpose of the contract is not undermined.
By meeting behind McMillan’s and Spicer’s backs to push through an amendment that would oust them from the company, it could be argued that the defendants were in violation of this covenant.
The judge agreed with at least some aspects of McMillan and Spicer’s lawsuit, which is why she granted summary judgment in their favor. A motion for summary judgment requests that the court issue a decision without proceeding to a full trial, arguing that there are no disputed material facts and that the party filing the motion is entitled to a judgment as a matter of law.
The resulting court order ensured the original terms of the Prince Legacy LLC agreement would remain intact and that McMillian and Spicer would remain managers of the company.
In this instance, the court agreed with McMillan and Spicer that the terms of the LLC could not have been lawfully amended by the defendants without authorization.
Though the defendants argued that all the allegations brought against them should be dismissed on various grounds, the judge disagreed, setting the stage for further litigation and possibly even a trial.
Not only would installing any of the defendants as managers of the LLC be in violation of the company’s terms, but it could be massively damaging to the LLC’s mission to preserve and protect Prince’s legacy, according to McMillan and Spicer.
“The Individual defendants lack any business and management experience, have no experience in the music and entertainment industries, and have no experience negotiating and managing high-level deals in the entertainment industry,” the duo writes in the complaint, obtained by Billboard. “They have a documented history of infighting. Based on the amount and complexity of the work that Prince Legacy is involved with, they are simply not capable of stepping in and managing its business.”
Although McMillan and Spicer have a 10% financial interest in approximately 50% of Prince’s estate, which is not insignificant, their lawsuit seeks to protect Prince Legacy LLC, not just their own financial interests in the company. As a result, if the case goes to trial and they win, it’s possible they’ll be able to recoup their legal costs from the defendants.
