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Prince Heirs Beat Primary Wave In Fight Over Estate’s Future Structure

"The heirs have waited for almost six years to have some control over how the Prince estate moves forward."

A Minnesota judge on Tuesday rejected Primary Wave’s proposal for how Prince’s $156 million estate should be structured in the years ahead, saying he would not force the iconic artist’s siblings into a plan “against their wishes.”

Primary Wave, an industry heavyweight that owns 50 percent of Prince’s estate, wanted his assets to be placed in a single holding company in which all heirs would be shareholders. But three other siblings said they should not be forced into a corporate marriage with Primary Wave against their will.

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On Tuesday, Judge Kevin Eide ruled for the siblings, saying he would not order them to “contribute their share to a business entity against their wishes.”

“The heirs have waited for almost six years to have some control over how the Prince estate moves forward,” the judge wrote. “The court will not, by choice, order that their share of the estate be turned over to a single holding company.”

Instead, Prince’s vast holdings will be handed over in equal parts to the two camps, with half going to Primary Wave and the other half going to the three siblings and their advisors. Each side will likely set up their own holding company to manage and operate the assets.

Prince died of a fentanyl overdose in April 2016 at the age of 57. Though legendary for his tight control over his IP rights, the iconic artist died without a will – sparking a complex process known as probate in which courts decide how to disperse a deceased person’s estate.

Because Prince died with no children or spouse, his six half-siblings were named legal heirs. Three have since sold all or most of their shares to Primary Wave; three others have retained their stakes. Advisors L. Londell McMillan and Charles Spicer, who are partnered with the three heirs, also control an undisclosed stake.

Though a settlement was reached in January to set a final tax valuation of $156 million – the last huge hurdle to resolving the probate proceedings – the two sides still could not agree on a structure of how the Prince estate would operate in the decades to come.

Primary Wave argued that a unitary group was the only efficient way to operate Prince’s vast and “interrelated” assets, which include a complex web of intellectual property rights. The heirs argued back they should be able to retain more control via their own company.

Tuesday’s decision resolved that issue in favor of the siblings, but it came with important caveats. Most notably, Judge Eide said he would not grant final approval until the two sides had formally agreed on a “management structure” that will allow the two sides to effectively cooperate on future projects.

“It would not be equitable for one heir to withhold their ascent to business opportunities that bind the other heirs or diminish the value of estate assets,” the judge wrote. “The court will require that the management structure be in place before distribution.”

In a statement to Billboard following Judge Eide’s ruling, Primary Wave founder Larry Mestel stressed that the judge had required the creation of a management agreement before any final resolution.

“Primary Wave has always felt it important to integrate all aspects of Prince’s business and assets because creatively, all assets interplay,” Mestel said. “The ruling requires an appropriate management agreement among all parties, which we wholeheartedly support. We continue to look forward to working with all interested parties to expand and preserve Prince’s legacy.”

McMillan, who represents the other heirs, told Billboard in his own statement said he was “pleased the court ruled in our favor over Primary Wave’s plan.”

“Our [heir] group represents Prince’s legacy, we have worked hard to help close the estate, and we look forward to soon managing the estate with all stakeholders to preserve his true legacy,” McMillan said.

Going forward, the exact timeline for final closure of the estate is unclear.

One final task is to convert Prince’s holding companies from so-called S-corporations to limited liability companies – a step being taken to limit the estate’s tax exposure. The administrator has estimated that it will take four to six months to do so. And in the wake of Tuesday’s ruling, the parties will need to begin formulating the management plan required by Judge Eide.

UPDATE: This story was updated Feb. 9 at 1:40 pm EST with a response statement from Primary Wave.