Trustees of Otto Bremer Trust can keep their jobs with new restrictions, a judge ruled Monday, while they await a trial over their attempts to sell the trusts’s biggest investment, Bremer Financial Corp.
The Minnesota Attorney General’s Office had asked the judge to put new people in charge of the Bremer Trust, which owns but doesn’t manage the firm best known as Bremer Bank, Minnesota’s fourth-largest.
Instead, Ramsey County Judge Robert Awsumb put several safeguards in place to ensure the trust continues to operate transparently and to protect the assets of the trust.
He ordered the three trustee’s compensation to be reverted to a level last approved by the court in 2017. He prohibited them from selling any more stock of Bremer Financial Corp. without the court’s approval, and compelled them to complete a course on the fiduciary duties of trustees of charitable trusts.
“By this order, the Court seeks to implement interim measures which protect the assets of the Trust, compel full transparency of the Trustee’s administration, and ensure the continued philanthropic activities of the Trust in this time when its charity is perhaps more needed than at any time in recent decades,” Awsumb wrote in a memo accompanying his ruling.
“With these safeguards in place, the issue of the potential removal of the Trustees is best addressed following a full evidentiary hearing and after careful consideration of all of the evidence received at that hearing,” he wrote.
A trial has not yet been scheduled, but is expected to start in 2021.
In addition, Awsumb has suspended the annual fee paid to trustees for non-Bremer Bank holdings, ordered them not to make new investments in private equity funds or hedge funds without getting certain approvals, and barred them from using their office space, equipment and staff time for non-trust purposes. He also ordered the trustees to consult with a human resources professional to give them advice and training.
The provisions are in response to multiple concerns raised in a lawsuit by the attorney general’s office alleging that the trustees have not acted in the best interest of the trust and should be removed.
At the same time, Bremer Bank has sued the trust for trying to sell the bank last year.
The bank is the only one in the nation that is owned by a charitable trust. Trustees last year, at a time of high valuations for banks and an accelerating pace of mergers in the banking industry, sought to sell the bank and said that proceeds from a sale would allow the trust to increase its charitable giving.
Bank executives and employees, however, tried to stop trustees, saying a sale wouldn’t be in the best interests of the bank.