Attorney's fees in Bremer dispute total $36 million -- and counting

  • Oops!
    Something went wrong.
    Please try again later.
·2 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

Oct. 20—Taking the witness stand for a third day, the chief executive officer of Bremer Bank acknowledged that attorney's fees related to a conflict with parent company and charitable foundation Otto Bremer Trust had totaled $20 million for the St. Paul-based bank alone.

Previous testimony in the probate hearing, brought forward in Ramsey County District Court by the Minnesota Attorney General's Office, revealed that the trust had already spent $16 million on lawyers since 2019. That brings total court costs to date to $36 million between the two sides.

In 2019, the trustees of the foundation — established by German philanthropist Otto Bremer in 1944 — attempted to unload controlling shares in the Bremer Financial Corporation to east coast hedge funds, the first step toward a likely bank sale. The Otto Bremer Trust owns a 92 percent stake in the bank, a major Midwest farm lender, which is a unique arrangement for a charity.

The bank board, based on key input from Bremer Bank CEO Jeanne Crain and board chair Ron James, filed a lawsuit to stop the share transfers in November 2019, igniting a series of separate lawsuits filed by multiple hedge funds, bank employees and the trust itself, as well as the charities division of state Attorney General Keith Ellison's office.

Crain, who has led Bremer Bank since 2016, wrapped up testimony Wednesday morning in the hearing after intense questioning by Mike Ciresi, an attorney for the three trustees.

"You didn't want the bank to be sold," said Ciresi, addressing Crain. "You spent $20 million ... engaging in this fight."

The attorney general's office has maintained that even if a bank sale were lawful, the rushed share transfer was executed hurriedly and recklessly, without so much as the proper insurance in place, so two trustees could pocket asset management fees. "It's the wrongdoings they discovered in the process," Crain said.

Jan Conlin, another trust attorney, then called Bremer Financial Chief Operating Officer/Chief Financial Officer Mitch Bleske to the stand to discuss his role in a potential bank merger with Great Western Bancorp of Sioux Falls, S.D. The merger drew initial interest from bank officials, but was later rejected by the bank board in June 2019. An inquiry from TCF Bank also never got legs.

Trust attorneys have maintained that not only is a bank sale lawful and warranted, but bank officials themselves opened the door to the possibility two years ago by presenting the three trustees with a series of written options. The hypothetical scenarios, produced by investment adviser J.P. Morgan, included a merger, an initial public offering or a potential sale.

Calling the October of 2019 share transfer motivated by personal enrichment, Ellison's office has sought to replace each of the three Trustees — all of them descendants of Otto Bremer's hand-picked advisers — based on allegations of self-dealing.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting