The fight over control of Bremer Financial Corp., Minnesota's fourth-largest bank, flared Monday when trustees from the charity that owns the bank were asked to resign from its board of directors and refused.
The rest of the board voted not to nominate them for re-election at the firm's annual meeting this spring.
The move appears likely to push the two Otto Bremer Trust trustees, Brian Lipschultz and Daniel Reardon, out of the roles that gave them insight into the company's finances and operations. For nearly two years, they have attempted to sell the bank, a step they say may double the assets of the trust to nearly $2 billion.
Their desire to unload the company clashed with strategy and direction pursued by Bremer Financial's executives and other board members. In 2019, the conflict spilled into the open as the two sides traded lawsuits. Last year, it drew in the Minnesota Attorney General's Office, which sued the trust and has asked a court to force the trustees to resign.
Bremer is the only bank in the nation owned by a charitable trust. The bank's founder, Otto Bremer, created the trust in the late 1940s just a few years before his death.
Banking regulations changed in the 1960s to prevent charities from owning banks. Bremer's situation was permitted to continue after a legal restructuring in the 1980s gave control of the bank to an independent board.
In announcing Monday's action, Bremer Financial said Lipschultz and Reardon in January told beneficiaries of the trust's charitable largesse — it distributes more than $50 million annually to organizations in Minnesota and nearby states — to apply for the latest round of assistance in the government's Paycheck Protection Program through the trust, putting it in competition with the bank.
"The trustees' actions are a clear breach of their fiduciary obligations," the bank said in a statement.
