Posted on 19 Dec 2008
The founder of Brooke Corp., the bankrupt franchiser of insurance agencies, has filed for personal bankruptcy.
In an abbreviated Chapter 11 filing Tuesday in U.S. Bankruptcy Court in Wichita, Robert D. Orr didn’t specify his assets or liabilities but checked off boxes listing estimated assets ranging between $100,000 and $500,000 and estimated liabilities ranging between $50 million and $100 million.
The filing included a list of Orr’s 20 largest unsecured creditors, most of them banks. The largest were First United Bank of Frankfort, Ill., with an estimated claim of $13.9 million, ONB Bank and Trust Co., of Tulsa, Okla., with an estimated claim of $11.5 million, and Citizens Bank of Chillicothe, Mo., with an estimated claim of $9.5 million.
Most of the debts were listed as disputed.
Although Orr will be required to file a detailed list of his creditors and their claims within a few weeks, the mailing matrix filed with his bankruptcy petition listed 190 creditors — many of them small banks in Kansas and elsewhere in the Midwest.
Scores of banks bought pieces of loans that Brooke, through one of its affiliates, extended to its franchisees. Other banks invested in loans that Brooke, through affiliate Aleritas Capital Corp., bundled into securities and sold on Wall Street.
Orr guaranteed many of the loans.
The Kansas City Star reported last week that the FBI was investigating Brooke and the circumstances surrounding its collapse.
Orr founded Brooke in 1986 and headed the company until recently. A federal judge named former Jackson County prosecuting attorney and appeals court judge Albert Riederer as special master to oversee Brooke after a New York bank sued the company in September.
In a release announcing the bankruptcy filing Wednesday, Orr said, “Last year I retired as a company executive, but I came out of retirement in April of this year to help Aleritas and later Brooke Capital through difficult economic times. With the benefit of hindsight, I regret returning as a company executive because the price paid by my family has been extraordinary.
“As an executive taking over management of these troubled companies just prior to their collapse and as an executive responsible for making the difficult decisions required to turn around these troubled companies, I have become the target of attack for anyone with a complaint.”