The Bank Slate


Judge urges Bremer Financial to find a buyer

A judge has urged Bremer Financial and the trust that owns it to resolve longstanding legal differences and find a buyer for the St. Paul, Minn., bank. 

Ramsey County District Judge Robert Awsumb made the assessment as part of a 103-page ruling issued on April 29. 

“Capturing the hard-earned value of [Bremer] in today’s marketplace would greatly increase [founder Otto Bremer’s] charitable endowment, while allowing [Bremer] to grow and prosper in the region deemed so important to its founder,” Awsumb wrote. 

Legal wrangling between the $15 billion-asset Bremer and the Otto Bremer Trust, which owns 92% of the company, began in 2019 when Bremer filed a lawsuit against the trust and its three trustees. 

Bremer claimed that the trust planned to transfer some of the company’s nonvoting stock to a group of out-of-state hedge funds as part of a broader plan to replace the board and sell the bank.

The Minnesota Attorney General’s Office joined Bremer as a plaintiff in the lawsuit, which sought to remove the three trustees, alleging that they were pursuing a sale to benefit themselves financially.

Awsumb disagreed with that claim.

“The evidence does not support the argument that trustees pursued their strategy to increase their compensation or otherwise enrich themselves,” Awsumb wrote. 

While Awsumb removed one trustee for “inappropriate behavior,” he allowed the other two to remain. 

Despite encouraging the parties to sell Bremer, the judge’s order only addressed the status of the trustees, their compensation and filling the vacancy created by the removal. 

The trust owns the vast majority of “economic” shares, but it only has a fifth of the total voting power. Employees own the remaining 80% of voting shares.

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