A judge late Friday ordered the removal of the trustee at Otto Bremer Trust who pushed hardest for the sale of Bremer Financial Corp. during a 2019 dispute that turned into a courtroom battle.
But the trustees were acting within their duties to explore selling Bremer Financial, Minnesota's fourth-largest bank, Ramsey County District Judge Robert Awsumb said. He also suggested the two St. Paul institutions should end their decades-long relationship.
"There are many valid reasons supporting further exploration of strategic options to separate [Bremer Financial] from its ownership by the Trust," he wrote. "Doing so may very well be in everyone's best interests."
In a 103-page ruling, the judge ordered trustee Brian Lipshultz out. He wrote that Lipschultz "allowed his own personal interests, enmity, or vindictiveness to impact his decisions and behavior as a trustee of one of the region's most important charitable institutions."
The dispute is rooted in a unique relationship in American banking: Otto Bremer Trust's ownership of Bremer Financial is the only instance of a charity still owning a bank. Nearly all U.S. charities, including those associated with founding families, gave up ownership of companies following tax law changes in the 1960s.
The Bremer relationship survived via several legal compromises and remained amicable for decades. But in 2019, trustees and bank executives started to fight bitterly over who should control the future of Bremer Financial — and whether the trust could sell its 90% stake in the bank.
A series of lawsuits led the Minnesota Attorney General's Office, which has oversight of charitable trusts, to intervene. After a nine-month investigation, it petitioned the court to remove the three trustees on the grounds of various breaches of duty.
Awsumb ruled against nearly all those allegations. He said the other two trustees — Daniel Reardon and Charlotte Johnson — could remain in place.