Bremer Bank executives in the late 1980s acknowledged that Otto Bremer Trust, the charitable foundation that owns the state’s fourth-largest bank, had the right to sell the bank and could do it at any time, according to a newly unsealed document in their current court battle.
The trust argues that the document, part of its latest legal claim against current bank executives, shows that the bank’s leaders more than a generation ago recognized that its chief obligation was to sustain itself as a charity.
Leaders of the trust and executives of Bremer Bank have been fighting for more than a year over who would control a prospective sale of the bank, which has more than 80 branches in Minnesota, Wisconsin and North Dakota.
The future of Bremer, the only bank owned by a charity in the country, became a dispute after executives received an expression of interest from a potential buyer early last year. Trustees encouraged bank executives and directors to pursue other offers, then began their own effort to find buyers.
The battle spilled into the open in October with the two sides trading lawsuits. Minnesota Attorney General Keith Ellison, whose office maintains oversight of charitable trusts in the state, began his own investigation, leading a state judge to put decisions on hold.
In the latest counterclaim, filed last month and unsealed Monday, the trust is seeking individual damages against the bank’s directors for slowing down efforts to find a buyer. The trust said the onset of the coronavirus pandemic has greatly reduced the chances for a deal and aims to hold the directors personally responsible.
“The opportunities that [the trust] had in 2019 to sell … no longer exist given the pandemic,” they said in the new counterclaim.
In a statement Tuesday, Bremer Bank called the allegations in the trust’s new claim “false and legally improper.”
“The trustees’ claims are inconsistent with the evidence in the lawsuit and will not withstand scrutiny,” the bank said. “Bremer Bank was not for sale last October, and it is not for sale today.”
In the new filing, Bremer Trust points to a prospectus and other documents created in 1988 and 1989, a period when compliance with a federal law led it to restructure its voting rights and the bank’s board.
One of those was a memo written in June 1988 in which Terry Cummings, then chief executive of Bremer Bank, told other bank executives that Bremer Trust could get an offer to sell the bank at any time and “they have the power to vote whether to accept or decline such an offer.”
The trust and bank in recent weeks fought over whether the documents from the late 1980s could be disclosed publicly.