The directors of the Otto Bremer Trust will continue to try to sell Bremer Financial Corp., Minnesota’s fourth-largest bank, whether or not it makes financial sense, the Minnesota attorney general’s office said in a post-summary. trial of his efforts to suppress them.

Trustees said in their own summary of the October trial that they have always handled conflicts of interest “with proper precision” and should be allowed to keep their jobs atop a foundation that distributes dozens each year. million dollars in the Midwest.

The documents, which were filed Monday evening and made public on Tuesday, summarized a dispute that had started in 2019 between the St. Paul-based Bremer companies – and which will soon be in the hands of Ramsey County District Judge Robert Awsumb.

Lawyers are due to present their final arguments to Awsumb on January 31. The judge will then have about three months to render a decision that could affect not only the management of the trust but also its main asset, Bremer Financial.

The charity is the only one in the United States that still has a bank. Most of the bank’s profits go to the trust, which then distributes the money to the states where the bank operates.

In 1989, the Bremer entities devised a workaround to a 1969 federal law that prohibited foundations from owning large companies. In their compromise, the trust retained a 92% stake in Bremer Financial, but took a minority stake in its operations.

For 30 years, the two Bremer entities have generally operated at arm’s length. But their competing interests surfaced in early 2019 when executives at Bremer Financial told directors that, as valuations soared in the banking industry, another bank had expressed interest in a merger.

The Trustees realized that a sale could create a moment of liquidity for its largest asset. They estimated that the proceeds from a sale would double the trust’s asset base by roughly $ 1 billion. The trust would then be able to diversify into other investments that could grow at a faster rate than Bremer Financial.

In the summer of 2019, the bank’s directors and board were arguing over whether and who would lead a sale or other strategic move. The bank’s executives and board accused the directors of trying to personally profit from a sale, saying a rich trust would pay them higher wages. Directors highlighted the high salaries of executives and their desire to keep their jobs.

After a series of lawsuits, the attorney general’s office, which oversees charitable trusts, stepped in and sued to remove Bremer’s trustees – Charlotte Johnson, Brian Lipschultz and Daniel Reardon. The GA’s office said it is not taking a position on the eventual fate of Bremer Financial, but its entry into the deal effectively froze all further market action.

In the latest filing, the state underscored its argument that the three trustees behaved in a way that was not in the best interests of the charities that benefit from the trust’s annual donations. Almost two-thirds of the 106-page document focuses on the dispute that arose in 2019, including a partial sale of the trust’s stake in Bremer Financial to other investors who supported a full sale.

The state said the current directors had gone so far in their efforts to sell the stake in Bremer Financial that, if they stayed, they would strike a deal “regardless if it’s better for the trust.”

“Changing circumstances call into question whether directors will assess the future need to sell and use their discretion based on legitimate factors, as opposed to selfish factors,” the state wrote.

As part of its criticism, the state noted that the administrators spent nearly $ 20 million trying to sell Bremer Financial, $ 7.5 million to fight the Attorney General’s trial and $ 1.9 million. dollars to complete the agency’s survey. The state has not disclosed what it spent on the Bremer dispute.

In their filing, the directors said their actions could not be “reviewed or valued in a vacuum without acknowledging the conduct” of officers and members of the board of directors of Bremer Financial. They noted that Bremer Financial spent more than $ 20 million in costs associated with the litigation it initiated. The directors placed the trust’s legal expenses at around $ 16 million.