This is the most important question asked since our announcement in October, so we want to be as clear about this as we can in our answer: Our only motivation is to manage OBT in the manner that Otto Bremer set forth in his Trust Instrument and for the purposes he intended.
In creating OBT, Otto Bremer sought to help communities, families, and individuals in our four-state service area. We believe in that purpose; our predecessors believed in it and entrusted it to us. We take this responsibility seriously, on par with the most binding and consequential promises we make in any facet of our lives.
A related question is why we’re motivated to act now. Here, too, we want to be as clear as we can: Our actions and decisions over the last several months have been driven by (1) new information indicating that the fair market value of our BFC stock is substantially greater than the previously calculated value, and (2) our fiduciary duties as BFC directors to all BFC shareholders.
The new information triggers a number of mandatory responsibilities for us, including two that are relevant here:
- This increased fair market value of our BFC stock must be reported on our next 990-PF tax return; and
- We must distribute at least 5 percent of the fair market value of our assets each year.
To illustrate the effect of these requirements, if the fair market value of OBT’s assets is $1 billion, we are required to distribute at least $50 million each year; if the value of OBT’s assets is $2 billion, we are required to distribute at least $100 million.
These responsibilities are not discretionary for us; federal tax law is clear and unambiguous on both points.