Prince's Estate Is Open for Business, Following Judge's Ruling
The trust overseeing the late pop superstar's assets now has limited authority to hire entertainment industry experts to help manage his music holdings.
Prince's estate is open for business.
A Minnesota state judge Wednesday (July 8) granted the trust overseeing the late pop superstar's assets limited authority to hire entertainment industry experts to help manage his music holdings and court investors for a summer celebration at his Paisley Park compound in suburban Minnesota.
Judge Kevin W. Eide agreed with special administrator Bremer Trust that there was an urgent need to begin monetizing Prince's intellectual property, rejecting opposition from a potential heir who wanted the process delayed until the court has determined who is legally entitled to inherit Prince's estate.
The judge also noted, however, that Bremer's appointment as administrator would end no later than Nov. 2, 2016, and insisted that any agreements set to extend beyond that date must be submitted to Prince's presumed heirs for review and would require court approval.
Judge Eide's order addressed the concerns raised by Bremer and by Prince's presumed heirs over an hour-long hearing at the Carver County District Court in Chaska, Minnesota, on Tuesday.
At that time, Bremer Trust argued that it required broad authority to immediately begin monetizing Prince's intellectual property assets, citing an enormous tax bill on the horizon and lucrative incoming offers.
Attorneys representing nine of Prince's potential heirs offered a variety of responses to Bremer's proposal, ranging from support to opposition to compromise.
Bremer Trust stepped into its role as special administrator for the estate on April 27 -- six days after Prince's death -- at the request of his sister, Tyka Nelson, who told the court her brother had apparently died without a will.
At Tuesday's hearing, Douglas Peterson, an attorney for Bremer, said the special administrator has a duty to maximize the value of Prince's estate and that any delay in entering negotiations would interfere with its exercise of that duty.
Because Prince died without a will, nearly half of his assets could be gobbled up by state and federal taxes, which would come due on Jan. 21, 2016, Peterson said.
With Prince's intellectual property estimated to be worth anywhere from $100 million to $300 million, the estate could be required to pay nearly $150 million in taxes, and the government could demand that assets be liquidated at "fire sale" rates if funds were not marshaled in advance, Peterson said.
According to Peterson, there are also valuable offers on table that Bremer needs to respond to soon, including potential investors who have expressed an interest in collaborating on a Prince tribute this summer at Paisley Park, Prince's suburban Minnesota home, studio and performance space.
Finally, the authorization sought was needed to combat widespread bootlegging of Prince's intellectual property, Peterson said.
Though Prince diligently prevented unauthorized use of his music and videos on sites such as YouTube during his lifetime, the floodgates have opened since his death, with free access to Prince's material now just a click away.
"The music world needs to know that this special administrator controls Prince's intellectual property rights," Peterson said.
Bremer would hire entertainment industry experts to advise and assist the trust in negotiating agreements that would most benefit the estate, Peterson said.
Peterson cautioned that direct involvement of the heirs in the decision-making process would hamstring the administrator's ability to effectively negotiate in the estate's best interests.
"This is a dynamic, wide-ranging business enterprise," Peterson said. "We cannot make business decisions by having what is now 20 lawyers and 9 parties sitting at the table."
Patrick Cousins, the attorney for Carlin Williams, said that Bremer's proposal would allow the administrator to limit the ability of heirs to control their inherited property for three to five years, or perhaps even permanently.
"Why move forward in tying up assets and creating circumstances the heir may not be able to get out of?" Cousins asked the court.
Cousins also noted that Prince himself was notoriously reluctant to cede control over his intellectual property and that ruling for Bremer would be "contrary to his lifestyle and how he dealt with his estate."
Williams is a 39-year-old musician, current doing time in a Colorado federal prison on a gun charge. He claims that Prince is his father, as the result of a 1976 Kansas City tryst with Williams' mother.
If genetic testing confirms Williams' relationship to Prince, he could become the estate's sole heir.
Attorneys for Tyka Nelson, Prince's sister, supported Bremer's position. Several other heirs offered a compromise.
Kenneth Abdo, the attorney for three of Prince's half-siblings, argued that Bremer should be allowed to begin monetizing assets, but that the heirs should be allowed to review and comment on proposed decisions.
The next hearing in the case has been scheduled for June 27