The fate of one of Minnesota’s oldest and largest philanthropies, the $1 billion Otto Bremer Trust, as well as the $13 billion bank that funds much of its charitable work landed before a Ramsey County probate judge Thursday, albeit online.
Attorneys for the Otto Bremer Trust and the Minnesota Attorney General’s office appeared remotely before Judge Robert Awsumb for an initial discussion of the state’s petition to remove the Trust’s three trustees, S. Brian Lipschultz, Daniel Reardon and Charlotte Johnson.
Minnesota Attorney General Keith Ellison’s office has sought to replace the trustees on an at least temporary basis in light of allegations that they engineered a stock sale that would ultimately lead to the sale of Bremer Bank — a major farm lender — in order to enrich themselves, among other accusations of self-dealing.
The attorney general’s office spent eight months investigating the Trust, interviewing staff through depositions and reviewing text messages sent by the trustees. Those text messages were sent to each other, and to an investment firm that courted potential stock buyers, with the goal they would replace the board of Bremer Bank and put the bank up for sale.
“The attorney general is required by law to supervise these trusts,” said Assistant Attorney General Carol Washington. “We get court filings, we get tax filings. … The understanding is you keep an eye out for problems and go to the probate court right away if you see it.”
Most of Thursday’s hearing focused on whether the petitions would move forward much like a civil trial — with opportunities for evidence discovery, new depositions and a full trial — or through alternate means, such as a summary decision by the judge based on written briefs.
Awsumb said the next hearing likely would be held the week of Sept. 21, with initial written briefs from both sides submitted to the court by then.
“We’re treading a little new water here in legal issues, for me, as it relates to supervision of charitable trusts,” Awsumb said. “I would encourage you to have the discussion about the proposed scheduling order by the time of our (next meeting).”
Michael Ciresi, an attorney for the trustees, said his office had requested the attorney general’s investigative file but had not received the full documents. The deposition materials filed with the court to date are partial, he said, and it’s unclear if the witnesses had access to legal counsel.
“What’s happened is the AG has taken parts of depositions and put it into the file,” Ciresi said. “We’re entitled to discovery.”
The attorney general’s office was represented Thursday by Washington, head of the office’s charities division, as well as two special assistant attorney generals. The office has asked the court to delay proceedings in a series of lawsuits related to the bank sale until the petitions are decided.
In addition to Ciresi, Otto Bremer Trust was represented by two attorneys with the Minneapolis-based firm of Ciresi Conlin.
The online hearing, held remotely via Zoom software, drew some 30 participants and observers, including representatives of Bremer Bank, which sued the trustees last October for attempting to sell bank shares to 19 out-of-state investors.
