Minnesota AG asks court to remove Bremer trustees
Wednesday, Minnesota Attorney General Keith Ellison asked a county court to remove three trustees of Otto Bremer Trust (OBT).
According to a release from Ellison’s office, two petitions and a memorandum of law were filed in Ramsey County Probate Court against trustees Brian Lipschultz, Daniel Reardon, and Charlotte Johnson, detailing "the trustees’ serious breaches of fiduciary duty, their longstanding failure to administer the trust effectively and in accordance with the directives of its founder, and multiple violations of state laws governing charitable trusts."
Ellison stated the court request follows a months-long investigation. Ellison said the petition filed Wednesday details how the trustees attempted to sell the trust’s BFC shares to a number of out-of-state hedge funds, "knowing it would trigger, in their words, ‘a cascade of unfortunate consequences.’"
As a result, the petition claims the attempt to engineer the bank’s sale "enriched (the trustees) significantly, exposed OBT to significant legal risk, and drained the trust of millions of dollars in expenses that should have been available for the charitable purposes of the trust."
Additionally, Ellison stated the trustees created "self-interested grants to promote their status in the community, including million-dollar grants to charities with which they were personally affiliated," as well as misused charitable assets "to run unrelated private businesses out of OBT’s offices." Trustees also, according to the attorney general’s office, spent "excessively on lavish office space and other overhead, paying themselves to redundant and unnecessary fees, significantly raising their own compensation without a corresponding rise in their duties, and creating and not remedying deficiencies in governance and oversight."
Ellison said the petition also indicated the trustees withheld important information so that the Minnesota Attorney General’s Office "would not block their plans."
"I do not take this action lightly," Ellison said in a statement. "But as the chief law officer of the state and supervisor of charitable trusts in Minnesota, I have the duty to make sure charitable assets are used properly and for the benefit of the public, not the private aims and personal enrichment of the trustees. Because the trustees’ misconduct is particularly serious, it requires particularly serious action by my Office."
The petition filed Wednesday reportedly requests that the Ramsey County Probate Court remove the trustees and appoint new fiduciaries to investigate the allegations and manage the trust.
The petition also requests immediate remedies and the appointment of interim trustees.