10/9/2008

PHILLIPSBURG — At least 41 workers at Brooke Corp. were laid off Tuesday afternoon because the banking and insurance company didn’t have the money to pay them, said Rob Orr, former chairman and chef executive officer of Brooke Capital Corp. and its largest shareholder.
The layoffs came from the insurance division.
Orr said Brooke has been unable to collect past-due servicing fees. The firm is being sued by the Bank of New York Mellon, which alleges Brooke misappropriated money. In its complaint, New York Mellon alleges that more than $5 million that was supposed to be deposited in trust accounts was instead put into the parties’ accounts, including accounts in their own bank, Generation Bank, formerly known as Brooke Savings Bank.
Brooke Corp denies the claim, and says the lawsuit is retaliation for its attempt to collect past-due fees. Problems on Wall Street are contributing to Brooke’s collection woes, Orr said.
“People here do certain processing for these Wall Street guys, and when we don’t get paid, we can’t afford to keep them,” he said.
Orr said the layoff affected some employees who have been with Brooke 15 years.
“This was devastating to the community,” he said.
Brooke Corp. has had layoffs before, such as from offices in Kansas City. But this layoff hit at home. About 200 people were providing support services for the company in early September according to the Kansas City Star.
Orr was reared in Phillips County.
“When you lay off people in a small community, we know everybody, and this hurts,” he said.
Orr said he and other directors have put “personal wealth on the line,” to keep the business in operation. “Personally, our financial situation is going to be ugly if we don’t get this thing resolved,” Orr said. “The employees have been exceptionally supportive.”
A reception is planned for Thursday afternoon, for all current and terminated employees. “Maybe when we’re together, we can draw a little strength from each other,” Orr said.