Connect with us

News

Bremer dispute nearing its end

Published

on

Bremer dispute nearing its end

Closing arguments in a lengthy probate hearing that could decide control over the Otto Bremer Trust — one of the state’s oldest philanthropies — as well as St. Paul-based Bremer Bank are scheduled before a Ramsey County District Court judge next Monday.

Citing a lack of checks and balances and allegations of self-dealing, the Minnesota Attorney General’s office has sought to replace the three trustees of the trust, a St. Paul-based charitable foundation that sits on at least $1 billion in assets.

“Trustees have persistently failed in the administration of the Trust and removal of the Trustees best serves the interests of the beneficiaries,” reads the Minnesota Attorney General’s Jan. 11 legal filing.

Attorneys for Brian Lipschultz, Charlotte Johnson and Daniel Reardon have argued that their corporate approach toward seeding charitable causes still adheres to the intent of Otto Bremer. Otto Bremer was a German immigrant who founded the philanthropy in 1944 and had used his personal fortune before that to prop up banks and farming communities across the Midwest during the Great Depression.

A Jan. 10 filing by attorneys with the law firm of Ciresi Conlin representing the trustees highlights the powers granted to the trustees by the trust’s founding documents.

“The Trust instrument provides considerable discretion to its trustees, both in the choice of selecting the charitable purposes to fund and in the general administration of the Trust and its property,” reads the proposed order from Michael Ciresi, Jan Conlin, Katie Lehmann and Mathew Korte.

DECISION COULD HAVE FAR REACHING IMPACT

Between the two sides, written findings of fact, conclusions of law and proposed judgment orders submitted to Ramsey County District Court Judge Robert Awsumb in mid-January span nearly 300 pages.

A decision in the probate case could have far-reaching implications for Bremer Bank, a major Midwest farm lender. The trustees have sought to sell voting rights in the bank — a $16 billion financial institution that ranks as at least the fourth-largest bank in the state — in order to position it for a sale.

The bank’s board of directors had explored the possibility of a sale or merger in 2019 and then pulled back. The move came over the objections of bank president Jeanne Crain and other board members.

The Bremer Trust trustees — led by Lipschultz — continued to unload controlling shares to 19 East Coast hedge funds in October 2019, under the stated premise that a bank sale could fund a huge expansion of the philanthropy’s charitable work.

Attorneys for the trustees have argued that the legal structures around the philanthropy require it to spend a certain percentage of its assets on charitable giving, and the bank’s growing value in 2019 left little choice but to sell the institution in order to comply.

The bank and its employees have filed separate lawsuits to stop the sale, the trustees have filed counter-claims, and several hedge funds have filed lawsuits of their own. The share transfers have been put on hold by the court until the legal disputes are resolved.

The legal fighting has proven costly. The trustees have spent $20 million on legal fees related to the sale of controlling interests in Bremer Bank, and an additional $7.5 million fighting the attorney general’s removal petition. Most of that money has come from the philanthropy’s charitable assets. As of late November, insurance had paid out $3 million related to the removal petition.

A ‘CORPORATE MINDSET’

According to Minnesota Attorney General Keith Ellison’s office, Reardon and Johnson largely allowed Lipschulz to institute a “corporate mindset” at the philanthropy, which adopted the slogan that it “works at the intersection of finance and philanthropy.”

The trio fired the trust’s executive director in 2014 and named themselves as co-chief executive officers, effectively eliminating day-to-day financial oversight of their decisions. Their salaries grew substantially, and Lipschultz and Reardon also received sizable benefits from naming themselves as investment advisers for the Trust.

Rather than allowing Ellison’s office to unseat the trustees, their attorneys have argued for raises of up to $200,000.

The trustees’ salaries currently average $450,000 annually, equivalent to about 2 percent of the trust’s cash income. In addition, Reardon and Lipschultz share another $388,000 in “investment advisory fees” between them.

Their attorneys called that compensation low, given that the founding documents allow them to pocket up to 4 percent of the Trust’s cash income. They recommended setting annual salaries at $425,000 to $460,000 for Johnson, and at $650,000 to $720,000 for each of the two men.

“The Trustees have not been compensated at or near the 4 percent level and do not ask to be compensated at that level now,” reads their latest legal filing.

GRANTS TO FAITH-BASED ORGANIZATIONS

In addition to the philanthropy’s traditional grantmaking, the three trustees began issuing loans marketed as “program-related investments” to Midwest charities, which caused some confusion among the nonprofit recipients.

Program officers testified that the foundation did not historically funds arts organizations, religious institutions, animal causes, schools, one-off special events or nonprofits located outside of Minnesota, Wisconsin, North Dakota and Montana.

Nevertheless, often working outside of the traditional staff review process, the trustees steered grants and loans to faith-based organizations, a private school that offers enrichment programs for low-income youth from Minneapolis, the Como Park Zoo and Conservatory, the Ordway Center for the Performing Arts, WE Day student events organized by a Canadian organization, and a newsletter on philanthropy written by a public relations consultant, among other causes that seemed to depart from Bremer’s specified priorities.

“It didn’t feel like a place with a lot of integrity,” said a program officer, taking the witness stand in late September. “I felt there were grants that were inappropriate.”

Other office behavior irked key staff, some of whom approached Ellison’s office with concerns.

Lipschultz, who joined the philanthropy in 2012, led a name change from the Otto Bremer Foundation to the Otto Bremer Trust, in light of its more corporate approach toward charity.

He continued to oversee Eagle Street Partners, an investment firm he founded that backs wireless infrastructure businesses, while at times using his executive assistant at the Trust to fax, file and ship packages.

The assistant testified he asked her to use her personal credit card and seek reimbursement from the philanthropy. When she raised concern with the foundation’s financial controller about using trust resources for a private business, Lipschultz asked the assistant to use his own personal credit card instead.

After being informed he was in violation of the rules of the Internal Revenue Service, Lipschultz testified that he later paid the trust back roughly $2,000 for the use of staff time and philanthropy resources, which in legal filings his attorneys deemed “an innocent … misuse that was appropriately and promptly corrected.”

OTTO BREMER TRUST

  • Based in St. Paul. 46 employees.
  • Founded in 1944 by philanthropist Otto Bremer.
  • Issues more than $50 million annually in charitable grants and loans across Minnesota, Wisconsin, North Dakota and Montana.
  • Owns 92 percent of Bremer Bank.
  • Overall assets of $1 billion to $2 billion.
  • Led by Trustees S. Brian Lipschultz, Charlotte Johnson and Daniel Reardon.

BREMER BANK

  • Based in St. Paul. 83 branch locations. 2,000 employees.
  • Third-largest bank in Minnesota by assets ($15.7 billion).
  • Earned net income of $155 million in 2020, and distributed $73.4 million to the Otto Bremer Trust that year.
  • Major Midwest farm lender.
  • Chief executive officer Jeanne Crain.

News

What’s behind Gleyber Torres’ early season resurgence?

Published

on

What’s behind Gleyber Torres’ early season resurgence?

Gleyber Torres, at just 25 years old, has already lived several lives in pinstripes.

He was the anointed one, the heir apparent to Alfonso Soriano, a two-time All-Star and a playoff hero, all before his 23rd birthday.

Then the pitfalls that many people face in their early-to-mid-20s began to rear their ugly heads. The pandemic certainly didn’t help, but even in 2021 as things returned to normalcy, Torres was dreadful at his job. The former top prospect who looked like a pillar of the Yankees’ next great team instead lost his starting shortstop gig. When he was in the starting lineup, he was often buried in the seventh spot.

When Torres was officially moved off of shortstop at the end of last season, his manager said of his defensive issues at the high-pressure position, “I feel like it’s been a weight on him.” Trade talks swirled, as the combination of poor play and the impending free agency of Carlos Correa, Corey Seager and others made Torres seem like the odd man out.

Instead, the Yankees stood pat on free agent shortstops, kept Torres, and traded for a defensive maestro in Isiah Kiner-Falefa. With the stability of knowing that he’d still be a Yankee, plus not having to worry about playing shortstop anymore, Torres has started 2022 with a bang.

As of Wednesday morning, Torres has a 117 wRC+ and .741 OPS, both his highest since 2019, the last time he consistently punished the baseball. After five straight hitless games in mid-April, Torres turned things around with a pinch-hit single in Detroit. Though his eighth-inning knock ended up being mostly meaningless — he was stranded on the bases and the Yankees lost 3-0 — that plate appearance did something to get him back on track.

Starting with that game, Torres has slashed .301/.342/.521. Seven of his 22 hits in that span have gone for extra bases, including four home runs. As a result, his numbers on the young season show a completely different player than the one who sulked through two straight soul crumbling campaigns.

“Last year was a very [hard] struggle for me,” Torres said after driving in five runs in a win over Toronto on May 11. “All the work I put in the offseason, I can show that every time I go to home plate. I mean I can still learn the game.”

Glancing at his numbers, the things that Torres has seemed to learn this year are fairly simple, and also a very common school of thought across Major League Baseball right now. He’s mashing fastballs, putting the ball in the air more often, and as a result, he’s making a lot more hard contact.

In 2021, as Torres’ overall slugging percentage sagged to a career-low .366, fastballs were one of the main culprits. He slugged a not-ideal .352 on heaters, and with two strikes, fastballs resulted in a strikeout 19.6% of the time. This year, though things could still change as he gets more at-bats, Torres is slugging .536 on fastballs. They’re only putting him away 12.9% of the time he gets in a two-strike hole.

Hunting fastballs is an effective strategy for most hitters, but on an even more simplistic level, so is hitting pitches that are meant to be hit. First-year hitting coach Dillon Lawson showed up to his new job with the catchphrase “Hit strikes hard”. Torres appears to have taken that to heart. According to Baseball-Savant, in three key areas of the strike zone — middle-up, middle-down and up-and-in — Torres is hitting the ball hard at a significantly higher rate than he was last year.

Hard contact is particularly damaging when it’s in the air. Every stadium can hold a well-struck grounder, very few will contain an airborne missile. For the last two seasons — the ones Torres would like to forget — he ran a ground ball rate north of 40%. This year, it’s down to 35.2% so far, with fly balls getting above 40% for the first time since 2019. As Rangers’ salty manager Chris Woodward can attest to, sometimes getting the ball in the air at Yankee Stadium leads to “Little League home runs.” Whether they go 320 or 420 feet, a home run is a home run, and Torres is already more than halfway to his home run total from last year.

The other adjustment Torres has made in the season’s first month is swinging more often. His swing percentage has shot up to 76.2%, nearly identical to the 76.3% he had when swatting 38 homers in 2019. This could be a sign that Torres isn’t overthinking things at the plate, a welcome sign for someone who has spoken openly about the mental strife he’s endured.

“First of all, I feel really good,” Torres told reporters last week. “I mean, my swing has gotten better and better. And I’m working hard every day to be the way I want to be. But so far, so good. I think confidence is back and that is the most important thing for me.”

That renewed confidence could also wind up being one of the most important things for the Yankees, a team that, at 27-9, has absolutely been the way they want to be.

()

Continue Reading

News

Vikings’ Kevin O’Connell wants to be more than ‘just an offensive coach’

Published

on

Vikings’ Kevin O’Connell wants to be more than ‘just an offensive coach’

Kevin O’Connell was an NFL quarterback and an offensive assistant in the league for seven years before being named head coach of the Vikings. But he doesn’t want to be pigeonholed.

“( want to) be visible to the defense, let them know that I’m learning their side of the ball just as much as they are,” the first-year head coach said Wednesday during the first week of organized team activities. ”I can complement them on detailed things they can do within our coverages, within a pressure, how we stop the run, and they can look at me as not just an offensive head coach.”

O’Connell replaced Mike Zimmer, who came from the defensive side of the ball and in eight seasons gave his offensive coordinator lots of leeway. O’Connell, who turns 37 next Wednesday, said it’s “really important” to him for defensive players and those on special teams to know he’s also invested in those aspects of the game.

With that in mind, Vikings linebacker Eric Kendricks was asked if he thinks of O’Connell as more than just an offensive coach.

“He definitely knows what’s going on, but I don’t think he can fairly say that,” Kendricks said with a laugh. “He’s definitely an offensive coach. He definitely wants to light us up on defense, but that’s only going to get us better on defense.”

Kendricks said O’Connell can be valuable working with the defense.

“I notice from him watching film and him going over film on the defensive side of things, he kind of goes over what the offense’s mindset or mind frame is as he’s talking about the defense,” Kendricks said.

DIVERSITY SUMMIT

From Wednesday through Friday, the Vikings are hosting a diversity coaching summit at the TCO Performance Center. It is being attended by 12 young coaches, 11 from colleges, with the intention being to groom them for possible future NFL jobs.

“It’s really a chance for us to get exposed to them from the standpoint of how do they carry themselves?” said Vikings assistant head coach Mike Pettine, who is heading the summit. “We’re going to do mock interviews, film everything and give them feedback on it. They get a chance to be in our meetings. We’ll talk to them as well (about) the NFL culture and expectations.”

Pettine wanted to have such a summit when he Green Bay’s defensive coordinator from 2019-2020 but the coronavirus pandemic hit and then he was fired from his job.

Among the 12 invitees is one woman, Roseanna Smith, director of football operations/running backs coach at Division III Oberlin (Ohio) College.

BRIEFLY

— The Vikings’ top three draft picks all could end up starting but O’Connell is not rushing anything. First-round selection Lewis Cine has been working behind Camryn Bynum at safety, second-round pick Andrew Booth Jr. has been sidelined as the cornerback recovers from groin surgery and second-rounder Ed Ingram is getting reserve snaps at guard. O’Connell said the Vikings have a “teaching progression” for rookies but they “can earn” spots for sure.

— O’Connell has been impressed with how second-quarterback Kellen Mond has looked during offseason drills. “Kellen’s having a good spring so far, working hard, digesting the system,” O’Connell said. During Tuesday’s second session of OTAs,  O’Connell said Mond “made a couple of checks at the line of scrimmage that he wasn’t prepared play-by-play for” but that he “instinctively” adjusted.

— Tight end Irv Smith Jr., who missed all of last season with a knee injury, did some work on the field Tuesday but O’Connell said the Vikings will continue to bring him back slowly. “He’s going to be a major part of what we do,” O’Connell said. “It’s just making sure that we’re doing it in a really responsible way.”

Continue Reading

News

Jim Hagedorn family suing widow Jennifer Carnahan for medical expenses

Published

on

Jim Hagedorn family suing widow Jennifer Carnahan for medical expenses

Family members of the late U.S. Rep. Jim Hagedorn of Minnesota say his widow, Jennifer Carnahan, who is running to replace her husband in Congress, hasn’t come through on a promise to pay them back medical expenses related to his cancer treatments.

Carnahan calls it a political stunt.

Two lawsuits filed Monday by Hagedorn’s mother, stepfather and sister allege they helped pay for cancer treatments he received at Envita Medical Centers in Arizona. Carnahan made a “clear and definite promise” to use inheritance she was to receive after his death to reimburse his family members, according to the complaints.

Carnahan said Hagedorn’s estate is required to go through the probate process in the courts to determine how to divide up his assets and there is nothing more she can do at this time.

“Grief affects everyone differently. Handling the affairs of my husband’s estate should be a private matter,” Carnahan said in a statement. “It’s unfortunate a very simple process has been turned into a political stunt.”

Hagedorn died after a long battle with kidney cancer on Feb. 17. He was told in January that there were no more treatments available for him at Mayo Clinic in Rochester, Minnesota, which is his congressional district, so he sought additional treatments at the facility in Scottsdale, Arizona, the Star Tribune reported.

A suit filed by Hagedorn’s mother, Kathleen Kreklau, and stepfather said they used $10,000 of a $25,000 home equity loan to help cover medical costs. In a separate complaint, Hagedorn’s sister, Tricia Lucas, said she charged $10,000 on a credit card to help cover the costs of his treatment and was promised repayment by Carnahan.

Both lawsuits allege Carnahan was to receive a $174,000 death benefit from the United States government after Hagedorn died, as well $174,000 from his life insurance policy.

Carnahan closed her statement by saying she wishes “Jim’s family well and know this time has been very difficult for all of us.”

Continue Reading

Trending