A University of Minnesota fraternity shut down last year for violations that included hazing and a serious, life-threatening drinking incident had its two-year suspension reduced and dropped its lawsuit against the university.

Sigma Alpha Epsilon (SAE) launched a lawsuit against the university in December, claiming the U defamed the chapter by saying there were "issues around sexual assault" at the fraternity. The university agreed to reduce the sanctions two months later. SAE dropped its lawsuit.

"The University believed that the resolution was in the best interests of all involved," university officials said in a statement released Wednesday.

"SAE initiated a lawsuit because of concerns about the handling of this matter, but ultimately did not pursue that option," the fraternity said in a statement.

Under the agreement, the fraternity's suspension will be lifted June 1. SAE will then be on probation for two years, requiring the fraternity to adhere to a number of restrictions, including keeping the fraternity house alcohol-free.

"SAE looks forward to returning to campus June 1 to continue its 115-year legacy at the University of Minnesota," the fraternity said in its statement.

The dispute between SAE and the university began last year when U officials imposed sanctions on the fraternity for incidents in 2013, 2014 and 2015.

In a 2013 hazing incident, new members were dropped off in a remote location with one to two kegs of beer and were told to finish it within a given time limit. University officials found that there were incidents at the chapter's formal event at an Alexandria, Minn., resort in April 2015 and at "Big Brother" events in October 2014 and March 2015. One of those events resulted in a student needing medical attention for alcohol consumption.

University officials said the hazing and "alcohol-related misconduct" were ongoing issues and proposed shutting down SAE until Sept. 5, 2017.

The chapter took issue with the university penalizing a group rather than the individuals involved. "The chapter was given a penalty unprecedented for other campus organizations, especially given the overall population of these incidents at the University," SAE said in a released statement.

After losing appeals to the university, SAE went to court to challenge the sanctions. It also initiated the defamation lawsuit against the university for comments related to sexual assault at the fraternity.

In its 17-page legal complaint against the university, SAE said there was no complaint of any sexual assault involving the fraternity or one of its members.

"Stated very simply, if there had been a shred of truth to the statements, the University would have investigated them and created data related to the investigation. The University did neither," according the fraternity's complaint.

University officials should have known that by making such a false statement that it would irreparably damage the reputation of the fraternity and its members, SAE said.

Star Tribune staff writer Dan Browning contributed to this story.

Mary Lynn Smith • 612-673-4788