Minnesota Supreme Court upholds removal of Otto Bremer Trust leader

The Minnesota Supreme Court upheld on Wednesday the removal of Brian Lipschultz as a trustee of Otto Bremer Trust, one of the state’s largest philanthropies.

In its ruling, the state’s highest court said Lipschultz “repeatedly placed his own priorities before those of the Trust” by using his assistant for his own personal and other nontrust-related tasks and by using the trust’s address for his own business.

The court also agreed he “used his position of power to intimidate a grantee on matters unrelated to any charitable purposes.”

And he did not just delay revealing the successor he had chosen to the Attorney General’s Office, “but affirmatively lied about having a named successor.”

The case — which was originally heard during a 20-day bench trial in 2021 and included more than 500 exhibits and testimony from more than two dozen witnesses — was brought by the Minnesota Attorney General’s Office.

Lipschultz’s attorney did not immediately return a request for comment.

“The Supreme Court’s decision properly protects Otto Bremer’s legacy from a trustee who put his own interests before the public that is supposed to benefit from the trust,” Attorney General Keith Ellison said in a statement. “By affirming Lipschultz’s removal, the Supreme Court made it clear that self-dealing, coercing grantees and lying to the attorney general in investigations has no place in the administration of Minnesota charitable trusts.”

The Attorney General’s Office initially sought to remove all three trustees of Otto Bremer Trust, citing various breaches of duty including self dealing, excessive compensation and creating a hostile work environment.

It sued after the trustees attempted to sell Bremer Bank, which the trust owns in an unusual relationship. The bank contested the sale, leading to several lawsuits.

While it did not contest the trustees’ right to sell their shares, the Attorney General’s Office argued the trustees were rushed and reckless in trying to do so.

In April 2022, a Ramsey County district judge removed Lipschultz, while allowing the other two trustees — Charlotte Johnson and Daniel Reardon — to continue in their positions. The court said then that Lipschultz “allowed his own personal interests, enmity, or vindictiveness to impact his decisions and behavior as a trustee of one of the region’s most important charitable institutions.”

However, the judge also said the trustees were acting within their duties by exploring a sale of the bank.

Lipschultz unsuccessfully appealed his ouster first to the Minnesota Court of Appeals, and then to the state Supreme Court, arguing the lower court did not use the correct legal standard in removing him and abused its discretion in deciding he had committed “a serious breach of trust.”

In the meantime, the other two remaining trustees selected Frank Miley, president of Cretin-Derham Hall High School, to replace Lipschultz as the third trustee of Otto Bremer Trust. The court approved his appointment last year.