But UMG ran into problems as it tried to move forward on the deal and ahead of the one-year anniversary of Prince's sudden death on April 21, 2016, questions began to emerge about whether the estate’s camp had misrepresented the licensing rights it sold to the record company. While the estate agreed to give UMG the rights to some of the Warner Bros. albums as soon as 2018, for example, Warner’s rights on those albums aren’t set to expire until 2021, sources said.
The timing is key as UMG’s separate merchandise and music-publishing deals with the estate aren’t guaranteed beyond the next five years, according to sources.
McMillan denied any misrepresentation at the time, and Koppelman declined to comment; both have since been replaced by Spotify's global head of creative services Troy Carter, who said in a statement released to Billboard on April 17 that the estate would be "assessing all rights relating to Prince's recorded music."
Sources tell Billboard there is a hearing scheduled later this month regarding UMG's demand that the deal be rescinded.
The court documents were related to the potential release of a new concert film recorded in 1983 during which Prince debuted several songs from his then-upcoming epic Purple Rain, including the title track and the No. 1 Hot 100 single "Let's Go Crazy." (Sources told Billboard that the Prince estate is shopping the concert film to streaming services and other distributors including Apple Music and Spotify.) When Comerica learned of the proposed transaction involving the concert footage, the bank notified counsel to Prince's potential heirs, stressing the proposal's confidential nature.
But three of the non-excluded heirs -- Prince's half-sisters Sharon and Norrine Nelson and half-brother John Nelson -- have retained McMillan as a business advisor, and requested a non-disclosure agreement be drawn up in order to share the proposal with McMillan as well. That request prompted Comerica's letter this week, which argued that because McMillan has been accused of fraudulent inducement, the estate is now adverse to McMillan, with the UMG rescission hearing still to take place; in a court hearing yesterday, however, the judge granted McMillan permission to review the proposal. The letter also notes that $3.1 million of the $31 million agreement was paid to McMillan and Koppelman as commission for negotiating the deal.
Prince's younger sister and five half-siblings are still waiting for a judge to make an official ruling on their heirship to the estate, said to be worth $200 million. Once a judge makes that determination, any further potential claimants would have one year to come forward and claim heirship. Dozens have done so thus far, though none successfully.
McMillan did not return a request for comment; representatives for both Carter and Universal Music Group declined to comment.
Additional reporting by Hannah Karp.
Update (7:39 p.m.): McMillan released a statement to Billboard, saying, "There are parties that are new to the Prince estate and unfamiliar with the music industry. They may need time to figure it all out. However, UMG has never accused me of any fraud. There is no basis for such absurd comments. There were legions of lawyers and other advisors all around the deals. I stand behind my advice and the deal, and so do the parties that were involved. I encourage people to await a full determination of the facts on deals before rushing to judgment, with respect to what is happening with this estate. I wish people would allow the parties time and the family opportunities to process all of what is going on with the estate."