McMillan v. Nelson

When recording artist Prince Rogers Nelson died, his estate passed to his six siblings in equal shares. Sharon Nelson (defendant), Norrine Nelson (defendant), and John Nelson, three of the siblings, assigned 20 percent of their collective 50 percent interest to Londell McMillan and Charles Spicer (plaintiffs), Prince’s former business advisors. John died, and his remaining interest passed to a trust (the trust) with Breanna Nelson (defendant), Allen Nelson (defendant), and Johnny Nelson (plaintiff) as cotrustees. Sharon, Norrine, the trust, McMillan, and Spicer created Prince Legacy, LLC, a Delaware limited-liability company (LLC), to hold their collective interest of Prince’s estate. They executed an LLC operating agreement that identified McMillan and Spicer as managing members and the others as nonmanaging members. The agreement stated that: (1) the managing members were responsible for managing the LLC’s daily business and affairs, (2) a managing member could be removed only for failing to perform responsibilities and with the remaining manager’s consent, (3) nonmanaging members were excluded from participating in control of the LLC’s affairs and could not act for or bind the LLC, and (4) the members were to meet every other month to provide meaningful input and consultation on LLC matters. The agreement also identified certain actions that could be taken only if at least 66 percent of the membership interests approved and others that required 100 percent approval. One action requiring 66 percent approval was amending the agreement. Sharon came to regret making McMillan and Spicer the managing members and attempted to insert herself in decision-making. When McMillan and Spicer did not acquiesce, Sharon convinced Norrine, Breanna, and Allen to join her in executing a written consent to amend the LLC agreement to remove McMillan and Spicer as managing members and replace them with Sharon, Norrine, and the trust. McMillan, Spicer, and Johnny sued Sharon, Norrine, Breanna, and Allen, seeking a declaration that the purported amendment was invalid under the agreement’s terms. The trial court considered McMillan, Spicer, and Johnny’s motion for partial summary judgment on that issue.