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Universal’s Move to Nullify $31 Million Prince Deal Approved by Judge

Judge Kevin Eide approved Universal Music Group and Comerica Bank’s motion to nullify the $31 million recorded-music deal the label struck with the Prince estate, according to court papers made public Thursday afternoon (July 13). In the motion, Universal argued that special advisors for the estate at the time, L. Londell McMillan and Charles Koppelman, misrepresented the assets the estate holdings, and Universal entered into the deal mistakenly believing it was acquiring recordings that remain under contract to Prince’s original label, Warner Music Group.

In Eide’s order and memorandum approving the motion, he cited nearly 25 documents from the various parties involved — including Universal, the former and current banks administering the estate, McMillan and Koppelman and various Prince heirs — filed after he’d asked the parties to work together to find a way to salvage the deal. The main sticking point was expiration dates: In the release announcing the deal, Universal said it would start to gain the rights to certain Warner material in 2018, but Warner disputed that date, although it kept its 2014 agreement with Prince private until Eide ordered the company to share it with Universal last month.

Ultimately, he determined, “As previously noted, this Court believes that the Estate must proceed in a cautious manner to preserve the assets of the Estate. While the rescission of the UMG Agreement may certainly be seen as proceeding with a lack of caution, the Court believes that the other option of long and potentially expensive litigation while tying up the music rights owned by the Estate makes the other option more treacherous.”

The decision does not affect Universal’s other deals with the estate struck by Koppelman and McMillan, which include music publishing and merchandising.

In a court document released last month, UMG wrote that McMillan said on June 22 that the Warner agreement “could have been drafted better,” and “there is no dispute that these rights are confusing.”

In a statement released on Thursday evening, UMG and the estate said: “Universal Music Group and the Estate of Prince Rogers Nelson welcome the court’s approval of our amicable resolution to this matter. We look forward to continuing to work closely together on Prince’s music publishing and merchandise to ensure that we deliver the very best experiences to Prince’s fans around the world.”

However, the judge’s ruling left several matters still undetermined, including whether Koppelman and McMillan will have to return their 10% commissions on the deal, and UMG’s accusations of fraud against McMillan for misrepresenting the terms.

Reached by Variety on Thursday evening, McMillan said, “Pleased this is resolved. We respect the Court’s decision. Comerica chose to rescind and I would have chosen otherwise than released Prince music with UMG or independently, as Prince did. There was no wrongdoing on our end. We stand by our work.”

The assets, which cover most of Prince’s recordings not under contract to Warner Music Group, are now presumably available — although a daunting task (with stiff legal bills) for anyone who decides to pursue them.

The temporary administrator of the estate at the time of the deal was Bremer Bank and the special music advisors were McMillan and Koppelman; they have since been replaced by Comerica Bank and Spotify executive Troy Carter, respectively.

Confusion over the deal, which covered much of Prince’s recorded works after the termination of his 19-year-long initial deal with Warner Bros. in 1996, began as soon as it was announced in February. The announcement said that “beginning [in 2018], UMG will obtain U.S. rights to certain renowned Prince albums released from 1979 to 1995” — the years that the artist was signed with Warner Bros. Records and released his most commercially successful recordings by far, including the “1999,” “Purple Rain,” “Parade,” “Batman,” and “Diamonds and Pearls” albums. However, Prince had cut a new deal with Warner in 2014 that sources say garnered him the rights to the majority of his work released on the label (albeit with certain key exceptions).

 

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