The special administrator for the trust in charge of Prince's estate has barred Mixed Blood Theatre's $348,000 claim resulting from a canceled benefit at Paisley Park.
The administrator said in a letter that the theater received Tuesday that the claim "has no basis in law or fact."
Officials at Mixed Blood said they expected the move and continue to pursue a settlement.
"It's a procedural thing that allows us a certain amount of time to file a suit," said artistic director Jack Reuler. He said Mixed Blood's attorneys are in touch with the estate's lawyers, and he hopes the matter will be resolved in a few months.
The Minneapolis theater was scheduled to hold its 40th anniversary gala at Prince's studio/home on May 14, three weeks after the superstar was found unresponsive in an elevator at the Chanhassen property.
Mixed Blood had sold more than 1,000 tickets to the event, which was aimed at retiring loans from a recent renovation as well as raising cash for operations.
The claim against Prince's estate stems from "lost income, cancellation fees and from other gala-related payments," said Reuler.
The letter starts the clock on a countdown for settlement. After that period ends — in January, Reuler believes — the theater would have to sue to protect its interests.
"It's had a big impact on our operating budget and repaying loans," he said. The theater has a $1.5 million annual budget.