In the 1940s, Otto Bremer established the Otto Bremer Trust to own Bremer Bank after his death. Today, most of the bank's profits go to the trust, which then distributes them as charitable grants. (Aaron Lavinsky/The Minnesota Star Tribune)

The Otto Bremer Trust and Bremer Financial have reached an agreement to end all litigation between them, concluding a yearslong court battle stemming from a dispute about the bank’s future.

Under the resolution, Otto Bremer trustees will rejoin the Bremer Financial board of directors “and the parties will work together to redefine the relationship” between the charitable trust and the bank, according to a news release Wednesday.

That relationship dates to the 1940s, when Otto Bremer established the trust to own the bank after his death. Today, St. Paul-based Bremer is the only U.S. bank a charity still owns. Most of its profits go to the trust, which then distributes them as charitable grants.

“We are pleased to reach this resolution,” Jeanne Crain, Bremer Bank president and CEO, said in a statement. “Bremer Bank is proud to have provided over $1 billion in dividends to the Otto Bremer Trust. Bremer Bank has gone above and beyond for its customers and communities for over 80 years, and we look forward to continuing that commitment.”

The dispute began in 2019, when Bremer Financial began exploring a merger of equals with Great Western Bancshares. The trustees objected, arguing that selling the bank would be more profitable, and soon after announced the trust’s shares in Bremer Financial were for sale. The bank sued the trustees, accusing them of a “disloyal scheme” to seize control of the company.

The Minnesota Attorney General’s Office, which oversees charitable trusts, intervened. The office conducted a nine-month investigation and petitioned the court to remove the three trustees on the grounds of various breaches of duty. Ramsey County District Judge Robert Awsumb ruled against nearly all of the allegations.

“I commend the parties for reaching this resolution,” Minnesota Attorney General Keith Ellison said in a statement Wednesday. “The Otto Bremer Trust can now focus on its charitable mission of serving the people of Minnesota, and Bremer Bank is also an important institution that serves communities around Minnesota. By resolving their litigation, they can begin to work together again on their shared interests.”

Only one trustee, Brian Lipschultz, ultimately lost his seat, and the Minnesota Supreme Court upheld his removal in February. The two other trustees, Charlotte Johnson and Daniel Reardon, chose Frank Miley, then-president of Cretin-Derham Hall High School in St. Paul, to replace Lipschultz. Awsumb approved the appointment last year.

In a statement Wednesday, the trustees said they “are pleased to put this litigation behind us and work with [Bremer Financial] to ensure that Otto Bremer’s vision of a perpetual charitable trust continues. Since inception, the Trust has made charitable contributions that have benefited people, places and opportunities in the Trust’s four-state area. This historic legacy will continue under this settlement.”