Olmsted County District Judge Robert Birnbaum’s order in the matter of the Father Kasal Charitable Foundation is "confirmation.

Tuesday, September 21, 1999

Olmsted County District Judge Robert Birnbaum’s order in the matter of the Father Kasal Charitable Foundation is "confirmation."

That’s how Attorney General Mike Hatch describes the court order that approves the final accounting of the foundation’s monies by Minnesota Trust Company, but officially removes MTC as the corporate custodian.

Instead, the court appointed Winona National Savings & Bank as the foundation’s new corporate custodian and McGladrey & Pullen as its accountant.

In addition, MTC’s petition for a distribution fee was denied and MTC’s request for formal approval of all of its acts as corporate custodian was also rejected.

Now, charities the deceased Catholic priest intended his monies to go to will receive some $3 million from the charitable trust.

But the father and son attorney duo cited in the court case call the judge’s order unfair and observations made in a memorandum attached to the order "heresay."

"None of those claims, including everything that was cited in the court’s memorandum dated Sept. 1, 1999, were ever proven in court. Minnesota Trust Company feels that the judge’s decision was completely unfair because it was based upon mere allegations and hearsay," the statement of Peter Plunkett and Warren Plunkett, son and father, respectively, and attorneys at law reads in part.

Birnbaum signed the order Aug. 30. It came before the Olmsted County district court judge May 19.

Matthew Anderson, an Assistant Attorney General appeared on behalf of the state of Minnesota. The Plunketts appeared on behalf of MTC.

The Revs. Michael Hoeppner and Michael Cronin were present on behalf of Father Kasal Charitable Foundation, Inc.

"We are very pleased with the court’s decision, because it ensures another $58,000 will go to charities and it also confirms our reasons for bringing this lawsuit in the first place," said Hatch in a statement released today.

"The court recognized that the Plunkett family controlled every aspect of this charity, thereby using Father Kasal’s generosity for their own personal benefit and also that my office was right to object to the exorbitant attorney fees," Hatch said.

"Ultimately, by settling this matter early, we achieved the goal we aimed for: ensuring that the $3 million dollars remaining in the Foundation would be used for charities instead of attorneys’ fees," Hatch said.

"Now, we can put the litigation aside and look forward to a new board of directors’ decision, regarding how the Foundation’s charitable assets will be used to help people in need," he concluded.

In January 1965, MTC became the corporate custodian of the Kasal trust’s assets. In January 1990, the Plunketts, Warren and Peter, incorporated the Kasal foundation with the help of Evan Larson, a step-son of Warren Plunkett, and at the time an employee of the Plunkett law firm.

The articles of incorporation declared all of the foundation’s assets be the "exclusive custody" of MTC.

Through the years, the Attorney General’s investigation revealed and Birnbaum’s memorandum noted, "significant interrelationships" between the foundation and the Plunkett family grew as well as the fees collected by the Plunketts.

MTC collected approximately $113,000 in management fees from the foundation as of September 1993.

"No accounting services or independent audit was ever secured from an outside accounting firm nor was legal advice or counsel received from the firm other than Warren F. Plunkett & Associates," Birnbaum noted.

The Plunketts’ version is this: Father Kasal started the Kasal trust in 1965 with approximately $750,000. Under the management of the Minnesota Trust Company, the Trust grew from $750,000 to approximately $3,000,000 in February of 1999 and gave gifts to catholic charities from 1965 to 1998 totaling approximately $2,000,000. In 1990, the Kasal Foundation was formed and the assets of the Kasal Trust were transferred into the Foundation. The Trust was to distribute all funds and terminate in 30 years and the transfer into the Kasal Foundation was designed to accomplish that goal.

The Minnesota Attorney General’s office began an investigation into the foundation in 1997 and in November 1998, the Attorney General alleged nine counts of violations of the original terms and restrictions placed on the charitable assets in 1963, all in violation of Minnesota law.

Among the charges were "operating the foundation for the primary purpose of carrying on a trade or business for profit" and "Filing false and misleading reports" for a seven year period.

Also, the state charged the Plunketts kept the foundation in force after the original agreed-upon date of September 1993 without distributing assets and for their personal benefit.

The judge noted that the Attorney General’s deposition of Warren F. Plunkett "affirmed many of the facts" in the case.

The Attorney General’s lawsuit was settled in February 1999 and the charities designated in the trust by Kasal were told to expect a distribution of near $3 million in assets. Those charities included Catholic Diocese of Winona, United Catholic Schools Foundation of Austin, St. Joseph’s Indian School of South Dakota and Pacelli High School of Austin.

The distribution was to take place after MTC submitted an accounting to the court, which the Plunketts did as well as asking for the $58,000 in fees.

The state of Minnesota and the foundation opposed the distribution fee.

The Plunketts argued, "Minnesota Trust Company’s two percent distribution fee comes from its fee schedule that has been in existence for many, many years. The fee schedule has not been changed since January 1, 1980 and was personally approved by Father Kasal himself. At the hearing in May, Minnesota Trust Company introduced evidence that other Trust Companies charge distribution fees, some based upon flat fees, others based upon work performed."

In his ruling, Birnbaum said "There is no basis for this relief" and didn’t allow the distribution fee.

As far as approving or disapproving "all acts of Minnesota Trust Company as corporate custodian," Birnbaum was clear.

"This Court has concluded that it would be unlikely to give such approval were that case presented," he said.

The Plunketts said, in their statement, "After all of the Kasal assets are finally disbursed, the name of the Kasal Foundation will be amended and will become the Plunkett Family Foundation, Inc. First Heartland Surety stock and the remainder interest from another family trust will remain in the custody of the Minnesota Trust Company and become assets in the Plunkett Family Foundation, Inc. which will continue to be administered by the Minnesota Trust Company. The Plunkett Family Foundation, Inc. will continue to give gifts to Catholic charities and the University of Minnesota where Warren F. Plunkett attended college and law school."