Judge denies Lipschultz effort to remain at helm of Otto Bremer Trust

Late in June, Brian Lipschultz requested permission from a Ramsey County District Court judge to continue serving as a trustee of the Otto Bremer Trust while he appeals the court’s decision to remove him from that position. The Otto Bremer Trust is one of the oldest and largest philanthropies in the state.

Judge Robert Awsumb made his ruling on Thursday. Simply put: No.

Awsumb said in a four-page decision rejecting Lipschultz’s application for a stay of the proceedings that even after studying the appeal papers that would be sent to the Minnesota Court of Appeals, he still saw no justification for delaying his April 29 judgment.

The judge said that there was a procedure in place should this court’s removal order be overturned and the man be ordered to be restored. He pointed out that suspending him until the outcome of his appeal would not do Lipschultz or the Otto Bremer Trust any irreparable damage.

Contrarily, “the problem boils down to returning this vital charity trust restored to its status quo as swiftly as feasible so that its goal and objectives may be accomplished to the advantage of the community at large,” wrote Awsumb.

In June, Lipschultz requested a halt to the proceedings due to his choice to appeal the judge’s ruling. His lawyers emphasized that the district court has wide latitude in the case and would preside over the selection of his replacement. The trust may not need a third trustee, the court might decide.

The Trust would be placed in an untenable situation if someone else were to take his place and “should the Court of Appeals reverse and order Brian Lipschulz restored,” according to a letter sent on his behalf by lawyers Andrew Parker and Alec Beck. There have been no problems throughout the previous two months that the trust has only had two trustees.

An extensive evidentiary hearing that started in the autumn of 2021 came to a conclusion with the judge’s decision to remove Lipschultz from the board last spring.

Bremer Bank, headquartered in St. Paul and founded by German philanthropist Otto Bremer in the early 1940s during the Great Depression, is the charity’s main financial asset and one of the biggest agricultural lenders in the Midwest.

It’s rare for a charity to hold a bank, and two trustees’ attempts to position Bremer Bank for sale by selling the majority of its stock to East Coast hedge funds had received significant criticism and several legal challenges. The state attorney general’s office, several hedge firms, the bank board, and the workers of the largely employee-owned bank were among those who filed lawsuits.

The judge said in his most recent decision that choosing Lipschultz’s successor would take many months and probably require a court hearing in early 2023, by which time the appeals process would probably be complete.

Following allegations by Minnesota Attorney General Keith Ellison’s office that Lipschultz used trust funds to run his personal investment business and used his inherited position to advance his own interests, Awsumb ordered his removal from the trio of trustees who oversee the St. Paul-based charity in April.

The judge stated at the time that Lipschultz “has repeatedly demonstrated that he cannot act in a purely charitable manner and has allowed his own personal interests, animosity, enmity, or vindictiveness to influence his decisions and behavior as a trustee of one of the most significant charitable institutions in the region.”

As bank managers, workers, and other plaintiffs had anticipated, Awsumb’s 103-page court ruling did not prevent the charity from considering the sale of Bremer Bank, one of its major assets and one of the leading agricultural lenders in the state.

Nevertheless, the ruling from last spring essentially dismantles the three-member board, creating concerns about who will succeed Lipschultz and the selection process.

Awsumb said in his ruling on Thursday that postponing the selection process “would place a severe burden on the trust” and that the two remaining trustees, Charlotte Johnson and Daniel Reardon, are entrusted with doing so.

A phone and email sent to Lipschultz’s lawyer on Thursday went unanswered.

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