×

Former Prince Estate Advisors Ordered to Place Millions in Commissions in Escrow

Last month the companies of Charles Koppelman and L. Londell McMillan, the former entertainment advisors to the Prince estate, were ordered to place in escrow millions of dollars in compensation they received as a result of two aborted deals they negotiated during their seven-month term. The two have appealed the decision.

An investigation recommended in December 2017 that the estate seek the return of the funds in question. Special administrator Peter Gleekel wrote, “Both have received something of value in the nature of an unjust action and are not entitled to it and under the circumstances; it would be unjust to permit them to retain it.”

The deals in question are a terminated transaction with Jobu Presents in connection with a fall 2016 tribute concert to the singer, and a January 2017 transaction with Universal Music Group that Warner Bros. Records claimed infringed upon rights that it held; that transaction was rescinded later in 2017 (a separate deal for the material was negotiated and executed by current advisor Troy Carter with Sony Music last year). Gleekel wrote that in the recorded-music deal they did not provide “anything of value that would entitle [them] to a commission” and that “it appears that the advisors did not comport themselves with the requisite care, skill and prudence called for under the circumstances.”

The total commission earned by Koppelman and McMillan on the approximately $31 million Universal deal is estimated to be around $3.1 million; court documents state the two were entitled to commissions of “ten percent (10%) on all Gross Monies (as defined herein) in connection with written contracts, amendments, extensions, additions, substitutions, replacements and modifications.” The amount of the Jobu commission is unclear.

In a statement to Variety, an attorney for Koppelman said, “The Court did not order [Koppelman’s company] C.A.K. to return its fee to the Estate, but simply provided that the funds should be placed in escrow pending the resolution of the case.  C.A.K. has appealed the Order and is confident that it ultimately will prevail on all of the issues raised in this matter, including its right to retain the fees that it earned under the terms of agreements that were expressly approved by the Court.” McMillan did not immediately respond to Variety‘s request for comment.

The pair negotiated several successful deals for the estate, including music-publishing and merchandise pacts, also with Universal, as well as performing rights.

The $31 million deal — which purportedly comprised all of Prince’s music not under contract to Warner Music as well as the contents of his much-vaunted “vault” containing thousands of unreleased recordings — was announced in February 2017 and immediately came under close scrutiny from Warner, which claimed it held the rights to some of the recordings included in the Universal deal. Sources tell Variety the main points of contention were the expiration dates of Warner’s rights to certain recordings, which are significant in the case of an artist whose commercial peak was 25 to 35 years ago. After several months of investigation and Judge Kevin Eide’s request that the parties find a way to salvage the deal, ultimately no way forward was found and the agreement was officially rescinded in July of 2017.

In response to last month’s decision, Koppelman and McMillan argued that the Estate’s decisions to return the Jobu advance and rescind the UMG agreement were “voluntary business decisions, and the current motion is an attempt to disgorge their commissions without any discovery or a fair opportunity to be heard”; they invoked a Minnesota statute addressing “the reasonableness of the compensation … [for] any attorney, auditor, investment advisor or other specialized agent or assistant.”

The court later found the statute did not directly apply to “third parties such as the Advisors,” adding, with some understatement given the unsettled state of Prince’s businesses in the wake of his death, that “the unique nature of this Estate again leads the Court into uncharted waters.”

 

More Biz

  • The dark Manhatten skyline, seen from

    StubHub Refunds $500,000 to Customers Shut Out by New York Blackout

    Saturday’s blackout in New York had an outsized effect on the city’s nightlife, with Madison Square Garden and the entire Broadway district seeing multiple shows cancelled due to the the power outage. As a result, StubHub has refunded more than $500,000 worth of tickets for cancelled events. According to a statement from the company, the StubHub [...]

  • Weapons Cache

    D.A. Files 64 Charges in Bel-Air Weapons Stockpile Case

    The L.A. County District Attorney’s office has filed 64 counts against Girard Saenz, the man who allegedly kept a stockpile of more than 1,000 weapons at a Bel-Air home linked to the Getty family. Saenz is accused of illegal possession of assault weapons, transferring handguns without a dealer license, possession of short-barreled shotguns, and possession [...]

  • 9-1-1: Angela Bassett in the series

    Fox Sees Primetime, Sports Ad Gains As TV Upfront Wraps

    Fox Corporation is the latest to benefit from stronger-than-expected trends in TV ad spending, as the company notched strong gains in advertising commitments for its next cycle of programming – its first since selling off a large chunk of its media assets to Walt Disney. Ad demand was stronger than many executives anticipated, according to [...]

  • BMI Promotes David Levin to Senior

    BMI Promotes David Levin to Senior VP of Licensing

    BMI today announced that David Levin has been promoted to Senior Vice President of Licensing, effective immediately. In his newly expanded role, Levin is responsible for all of BMI’s domestic licensing and revenue generation, encompassing radio, television, digital media, cable, satellite and general licensing.  Levin, who will oversee teams in New York and Nashville, reports [...]

  • Warner Music Group Logo

    Warner Music Acquires Musical Theater Indie First Night Records

    Warner Music Group has acquired First Night Record, an independent record label for West End and Broadway musical theatre cast recordings. The company will be overseen by WMG’s Arts Music Division, led by President Kevin Gore. First Night co-founder John Craig will join the Arts Music team under a multi-year consulting agreement to identify and record musical theatre productions in [...]

  • Woodstock 50 to Hold Open House

    Woodstock 50 to Hold Open House for Local Residents Before Permit Review Tuesday

    If nothing else, the producers of Woodstock 50 are persistent. After two permit applications to hold the troubled festival at the Vernon Downs racetrack in Upstate New York were rejected by the town of Vernon codes office, the producers and venue owner Jeffrey Gural today invited the local community “to embrace the Festival’s spirit of [...]

  • ILM Star Wars The Force Awakens

    ILM to Open Latest Effects Facility in Sydney, Australia

    Sydney, Australia, is to be home to Industrial Light & Magic’s fifth production hub. The Disney-owned special effects company currently has facilities in San Francisco, Vancouver, London and Singapore. The decision to open the Sydney outpost was announced Monday local time by executive creative director and head of ILM Rob Bredow, ILM executive Luke Hetherington, [...]

More From Our Brands

Access exclusive content