The power struggle between Bremer Bank and the philanthropic foundation that controls it is getting increasingly ugly, with the bank filing a lawsuit against the Otto Bremer Trust in a bid to forestall a "hostile takeover."
Bremer Financial Corporation has filed a lawsuit against the three trustees Otto Bremer Trust, who it is accusing of attempting to facilitate the sale of the bank against the wishes of its board of directors.
Last month, Bremer Financial says the trust announced its plans to transfer 37 percent of its voting stock to "19 out-of-state hedge funds" with the intention of replacing the bank's board of directors and putting the bank up for sale.
The Otto Bremer Trust has three positions on the bank's 10-person board, albeit controls the majority of the bank's shares. But upon proposing the bank's sale at a meeting last month, it was rejected by the board's other members.
Describing it in a press release as a "hostile takeover," Bremer Financial says OBT co-CEOs Brian Lipschiltz, Daniel Reardon, and Charlotte Johnson "recently orchestrated a series of events designed to wrest control of Bremer from its independent directors and force a sale that the Board does not support."
They were doing this, the lawsuit filing says, for the purpose of "enriching themselves at the expense of communities throughout the State and the region.
Bremer Financial claims the attempt to sell the bank represents an attempt "to seize control of the company from its employee shareholders and deliver it to OBT," and in the process claims the trust is violating its organization documents and "applicable law."
"We are extremely disappointed that OBT’s reckless unilateral actions have undermined a partnership that has delivered for the people of Minnesota, North Dakota and Wisconsin for more than 75 years,” said Jeanne Crain, Bremer Financial President and CEO and a member of the board.
"Regardless, Bremer will continue to focus on serving our customers, employees and communities with the same heartfelt determination that Otto Bremer instilled in our company when he established it in 1943.
"I remain confident in Bremer’s strategic direction, our sharpened focus on key customer segments and digital innovation, and in our dedicated and innovative team of more than 1,800 employees."
Trust says lawsuit hurts bank, employees
Bremer Bank is the fourth largest bank in the state, and has dozens of retail locations across the Twin Cities and in greater Minnesota.
Upon announcing efforts to sell the bank last month, Lipschultz said the decision was being taken as it's in the "best interests of the individuals and communities that OBT serves," and argues the sale would allow it to increase the trust's philanthropic work across the Upper Midwest.
In a statement sent to BMTN on Wednesday, the trust said: "It’s disappointing that BFC has chosen a path of obstruction and conflict in this matter. In doing so, they are acting in a manner that seems certain to hurt the bank and its employees, to waste the resources of the company and to hurt the people Otto Bremer dedicated his life and fortune to helping.
“The allegations in the lawsuit are false and without merit. We’re confident the courts will quickly see this tactic for what it is: an ill-founded attempt by conflicted management and directors to deprive all shareholders of the value of their stock and to deny employees and communities of any legitimate exploration of their opportunities.”