The band was assembled as an afterthought when Prince had recorded a bunch of instrumental tracks with Eric Leeds overdubbing saxophone. At the time of release of their first album 8 a press release touted Madhouse as the brainchild of a keyboardist from Atlanta by the name of Austra Chanel. Furthermore, the group, according to the official biography consisted of drummer John Lewis, bassist Bill Lewis, and Eric Leeds, of which only Leeds is a real person.
The group’s second album 16 released in November 1987, credits Dr. Fink and Levi Seacer, Jr. who played in the live line-up of Madhouse while they supported Prince on the Sign O’ The Times Tour. Of the two, only Seacer appears on the album, albeit on only two tracks. The fictional John Lewis (which are Prince’s father’s given names) is credited on drums once more although these are played by Prince again, except for two tracks where Sheila E. features uncredited as drummer.
Efforts to create a third album 24 did not come to fruition in 1988 and the project was shelved. Later, in '89/'90, efforts by Eric Leeds to create a different follow-up album to 16, tentativdly titled 26, in the end evolved into Leeds' first solo album Times Squared.
In 1994 a whole new 24 album was created, with a line-up of Prince, Eric Leeds, Michael B. (drums), Sonny T. (bass) and Levi Seacer, Jr. (guitar). However, this project was also is shelved in 1995.