Attorney General’s Office prevails in Otto Bremer Trust appeal

Minnesota Court of Appeals upholds district court’s decision to remove former trustee, affirms that he “continually breached his duties” and is “unfit to administer the Trust”

January 17, 2023 (SAINT PAUL) — The Minnesota Court of Appeals upheld the Ramsey County District Court’s decision to remove former Otto Bremer Trust trustee Brian Lipschultz. In today’s precedential decision, the Court of Appeals affirmed that Lipschultz “continually breached his duties to the Trust’s beneficiaries,” “caused the Trust to incur unnecessary expenses, injured the Trust’s charitable reputation, refused to disclose information to the AGO, and eliminated a relationship with at least one beneficiary.” The Court held that Lipschultz’s “actions support the district court’s determination that Lipschultz is unfit to administer the Trust and that he has persistently failed to administer the Trust.” 

“The Court of Appeals made the right decision by upholding the decision to remove Brian Lipschultz from the Otto Bremer Trust,” Minnesota Attorney General Keith Ellison said today. “I asked the court to remove him because of his repeated pattern of putting his own interests before the charitable beneficiaries he was supposed to serve, undermining Otto Bremer’s legacy.  By affirming Lipschultz’s removal, the Court of Appeals made it clear that self-dealing, coercing grantees, and lying to the Attorney General is unacceptable conduct for charitable trustees in Minnesota.”  

History of Otto Bremer Trust Litigation 

On August 12, 2020, the Charities Division of Attorney General Ellison’s office brought a petition to remove Brian Lipschultz and the other Otto Bremer Trust trustees. Following a weeks-long evidentiary hearing in October 2021, Ramsey County District Court Judge Robert Awsumb removed Brian Lipschultz. In its April 29, 2022 order that was a victory for the Attorney General’s Office, the district court found that Lipschultz engaged in “egregious” misconduct and a “pattern of improper behavior,” including “repeatedly” misusing trust resources for his personal benefit, acting with “hostile” and “coercive” conduct toward grantees, and misrepresenting key facts to the Attorney General in a manner that the court characterized as “disturbing” and “troubling.” Lipschultz appealed the order on June 28, 2022. The Minnesota Court of Appeals heard oral arguments on October 20, 2022. 

In Minnesota, the Attorney General through the Charities Division has civil enforcement authority over the state’s charitable trusts, nonprofit corporations, and soliciting charitable organizations. The Charities Division has no authority to enforce criminal laws. Under state law, charitable trustees have fiduciary duties to act in the best interests of the charitable beneficiaries of the trust. The Attorney General’s Office provides additional information about fiduciary duties and provides additional resources on its Charities homepage. 

The public may submit complaints to the Attorney General about potential misconduct or other concerns. Complaints may be submitted either by using a form on the Attorney General’s website, or by calling (651) 296-3353 (Metro area), (800) 657-3787 (Greater Minnesota), or (800) 627-3529 (Minnesota Relay).