Court approves deal to distribute assets, close Prince’s estate
Officials have reached an agreement to close the matter of pop superstar Prince’s estate.
In what is expected to be the final court hearing in the matter Friday afternoon, Senior Judge Kevin Eide acknowledged, “This has been a long road,” and agreed to sign off on the proposed deal.
Prince, who died of a fentanyl overdose in 2016, did not leave a will. He lived at his Paisley Park home in Chanhassen.
Earlier this year, the Internal Revenue Service and the estate’s administrator, Comerica Bank & Trust, agreed to value Prince’s estate at $156.4 million, a figure that the artist’s heirs have also accepted.
Since then, lawyers and consultants have been paid tens of millions of dollars to administer his estate and come up with a plan for its distribution.
The IRS and Comerica settled in the spring of 2021 on the real estate portion of Prince’s estate. However, it took until October 2021 to complete the trickier task of valuing intangible assets, such as rights to Prince’s music.
As part of the agreement, the IRS dropped a $6.4 million “accuracy-related penalty” it had levied on Prince’s estate. The Minnesota Department of Revenue, which agreed on the estate’s valuation, also has dropped an accuracy penalty, according to court filings.
In the end, the estate will be almost evenly divided between a New York music company — Primary Wave — and the three oldest of the music icon’s six court-recognized heirs or their families.
As part of the agreement announced in court, all of the expectancy interests held by Prince’s six heirs will be moved to two successor entities — Prince Oat Holdings, LLC, and Prince Legacy. Each will get around $2.8 million in cash and half of the membership units of the entities owned by the estate (PRN LLC, PRN Real Estate LLC, NPG Records LLC, Paisley Park Enterprises LLC and NPG Music Publishing LLC).
Additionally, Comerica can keep a $3 million reserve to pay for additional expenses to close the estate. Portions will then be distributed down to successor entities until it is empty.
Comerica is also authorized to make payments from the estate to resolve attorney liens filed against heirs.
Eide agreed to formally approve the deal as soon as the necessary documents are filed, which could be as early as Friday afternoon.