City sues over Bryson Trust funds

CELINA - The city of Celina has filed a lawsuit against First Financial Bank of Cincinnati claiming it has mismanaged the Bryson Trust Fund and requesting the trust be merged into a public charity and then terminated, among other actions.

The case was filed last week in the Mercer County Common Pleas Court Probate Division by attorneys Edward Smith and Jack Pook on behalf of the city.

The charitable Bryson Trust has been the source of millions of dollars that have been spent over the years to improve the city's parks. Officials believe First Financial has failed to fulfill its duties as trustee of the multimillion-dollar Bryson Trust Fund, according to an ordinance passed at a city council meeting last month.

The sprawling complaint lays out numerous grievances against First Financial as trustee of the Bryson Trust Fund and in its corporate capacity while acting as trustee. The suit includes five claims for relief.

The bank's officers who resided in the community were responsible for the administration of the trust until sometime in 2017, the complaint states. Since then, First Financial has closed all but one Mercer County branch and moved administration of the trust to its Cincinnati headquarters.

As a result, the city has had no local representative acting as a trust officer other than a local attorney with whom it can communicate.

"Such communications have resulted in unnecessary costs in the administration of the Bryson Trust and have not been productive, but rather, adversarial," the complaint states.

First Financial Bank has failed and refused to respond to the city's requests for trust information, to which the city is entitled under the Ohio Revised Code, the complaint alleges.

The complaint cites as an example the bank's failing to respond to the city's requests for three years of trust tax returns and declining to meet with city officials to discuss concerns about administration of the trust and issues contained within the complaint.

Merger of the fund into public charity

The city's first claim for relief is a merger of the trust fund into a public charity.

The complaint asserts that pursuant to the Ohio Trust Code and chapter 2109 of Ohio Revised Code, "it would be in the best interests of the Bryson Trust that the Trust be terminated and that the Fund be merged into the Dayton Foundation, a nonprofit public charity."

The Dayton Foundation, the complaint states, is a community foundation doing trust and corporate business with headquarters in Dayton. It is a qualified community foundation as defined in state law.

The city would receive annual distributions of income that would be spent based on the determinations of a committee initially appointed by the court and consisting of Celina residents, the complaint states.

The merger would result "in a more effective and economical administration of the Fund" by allowing the foundation to provide expertise, economy of scale and investment and regulatory management, according to the complaint.

Termination of trust by merger

Secondly, the city seeks to terminate the Bryson Trust via merger into a public charity, according to the complaint.

"In order to facilitate the merger of the assets of the Trust into a public charity, the Court should remove the Trustee to benefit the community and the sole beneficiary, the City of Celina, Ohio," the complaint states. "The merger of the trust assets in a public charity furthers the purposes of the Trust, preserves the vision and intent of the testator as broadened by this Court, and substantially enhances the management, investment and distribution of the Trust interest and principal in a more effective, efficient and substantial manner, with input from the local community."

Modification of trust and 'cy pres'

The city's third claim for relief is for the court to exercise the doctrines of "cy pres," modification, variation and/or deviation to terminate the trust and merge it into a public charity "for the uses and purposes intended by the testator and as previously broadened by this Court to include the recreational needs of all the residents of the City of Celina."

The complaint cites a Mercer County Probate Court's findings and opinion in relation to a petition filed May 21, 1960, by initial trustees Roscoe D. Riley and Gertrude Einfalt for construction of will.

"(The) Court, under cy pres doctrine preserving the charitable trust, can and does determine that the general intent of the testator, Ed L. Bryson, was to provide wholesale recreation for all of the residents in Celina, Ohio which by its very nature constitutes a charitable trust," the court document reads.

Breach of fiduciary duties and prudent investor act

The city's fourth claim for relief is breach of fiduciary duties and the Ohio Prudent Investor Act.

The complaint alleges First Financial Bank has violated the Ohio Trust Code by failing to respond promptly to the city's inquiries and by refusing to meet with city officials.

Moreover, the complaint states that the Bryson Trust portfolio consists in part of three parcels of farmlands together consisting of 315 acres.

The complaint alleges that based on gross receipts received by the trust from the lease of the farmland, "it appears that the lease is not productive, and the tenant may be receiving substantial and material preferential treatment on the lease terms while the Trust receives very little."

The bank has taken no action to liquidate the farmlands "in violation of its duties to properly invest the assets of the Trust and by its failure to sell the farmland," the complaint asserts.

Order for sale of real estate

The city's final claim for relief is that the court order the successor of the Bryson Trust fund has full power and authority to sell the farmlands to advance and sustain the gift of the fund.

If the court does not terminate the trust and merge it with the public charity, the city through the complaint asks that First Financial Bank be removed and replaced as trustee and that the trust's farmlands be sold.

The city also asks the court to determine remedies and assess any damages resulting from First Financial Bank's allegedly breaching its fiduciary duties and the Ohio Prudent Investor Act.

It also requests that the court assesses upon First Financial Bank the city's attorneys fees "and determine that no attorney fees for First Financial Bank with respect to this action shall be charged to the Trust Fund."

The newspaper sought a response to the complaint from local attorney Molli Schleucher, who has worked with Celina First Financial Bank officers representing the Bryson Trust. She did not return the call as of press time.

Correction:

First Financial Bank has branches in Celina, Fort Recovery and Rockford. The error was due to information in a complaint the city of Celina has filed against the bank.