6 October 2023
Nearly four years ago, officials with Bremer Bank and the Bremer Financial Corporation filed suit against the Otto Bremer Trust, the philanthropy that oversees them, arguing that its three trustees attempted to enrich themselves by ousting the membership of their corporate board and replacing them with hostile investors.
They alleged that representatives of 19 East Coast hedge funds and other deep-pocketed interests were poised to take over the St. Paul-based bank, one of the Midwest’s largest farm lenders, and position it for sale.
That case — and the sale of BFC voting shares to new shareholders — was put on hold when the Minnesota Attorney General’s office, which regulates charities, filed legal action of its own aimed at replacing the three trustees outright. The effort was only partially successful last year when Judge Robert Awsumb removed a single trustee — S. Brian Lipschultz — whose position was filled this year by attorney Francis M. Miley, the outgoing president of Cretin-Derham Hall High School in St. Paul.
Otto Bremer Trust trustees, from left, S. Brian Lipschultz, Charlotte Johnson and Daniel Reardon. (Courtesy of the Otto Bremer Trust)
On Wednesday, the long-stagnant court case filed by the Bremer Financial Corporation reopened.
Ramsey County District Court Judge Mark Ireland ruled to deny eight separate counts filed by trustees Lipschultz, Daniel Reardon and Charlotte Johnson, who had sought to have the lawsuit against them thrown out on the basis of failing to adhere to the trust’s bylaws, lack of standing, breach of fiduciary duty and shareholder oppression.
The trustees had renewed their motion to dismiss the case in May, but were not successful.
In other words, the legal case can now move forward, with board members of the Bremer Financial Corporation — Ronald James, Jeanne Crain, Mary Brainerd and Glenn McCoy — serving as plaintiffs and the three past and present philanthropic leaders serving as defendants, both individually and in their capacities as trustees. Miley, who joined the trust in February but did not start fulltime until the school year ended in June, is listed as a fourth defendant.
In 2019, a class action lawsuit against the trustees was filed by bank employees, who own 8% of the financial stock, and 80% of the controlling stock or voting shares. The two lawsuits have been officially linked in court and were ruled on together by Ireland. The judge has yet to schedule the next court date.
“We appreciate the Court’s careful attention to this important matter,” said officials with the Bremer Financial Corporation, in an unsigned written statement released after the Oct. 4 ruling. “Nearly four years after BFC initially filed litigation, the Bremer case is resuming, and we look forward to having our day in court.”
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