By MIKE CORN

mcorn@dailynews.net

Hope fell flat on its face last week for the financially struggling Brooke Corp.

Today, only 13 Brooke employees are working at the processing center in Phillipsburg, and only three at the company's headquarters in Overland Park.

It was a week of highs and lows.

On Monday, it was announced that Brooke Insurance would be purchased by two Kansas men, including Terry Nelson, CEO of Long Island-based Nelson Farms and vice chairman of First State Bank in Norton.

By the end of the week, he and partner Lysle Davidson, who operates an insurance agency in Johnson in far southwest Kansas, withdrew the offer, according to the Kansas City Star.

"It was much different from what was represented to us," Nelson told the newspaper.

The apparent problem rests with the number of franchisees left within Brooke.

While Nelson told the Star that the offer was contingent upon 350 agencies remaining with the network, a Chapter 11 bankruptcy filing on Tuesday reported that only 250 agents remained. At one time, Brooke had nearly 900 agents nationally.

With the withdrawal, Albert Reiderer, the special master appointed to handle the affairs of the company, also appointed as trustee by the bankruptcy court, cut the ranks of employees on Friday.

Phillipsburg had maintained a work force of slightly more than 60 employees. After Friday, only 13 remained.

That skeleton staff is expected to process remaining affairs of the company and make sure that agents get their commissions.

"Other than that," Reiderer told the Star, "we won't be functioning in any insurance way. We'll be functioning to wind down the (bankruptcy) estate."

That bankruptcy petition -- for both Brooke Corp. and Brooke Capital Corp. -- was filed Tuesday, with Riederer being named trustee a day later.

While observers and participants in the struggling company have suggested that bankruptcy might be the alternative, such a move has been in the works since Oct. 10, when the board of Brooke Corp. voted to file bankruptcy.

In its filing, the company indicated that was unlikely that the entire company could be reorganized and rehabilitated.

Prior to the latest round, there have been a number of layoffs within the Brooke organization. Prior to Friday, 62 employees had remained on the job in Phillipsburg.

Notice of the bankruptcy filing was sent out via a filing with the Securities and Exchange Commission. Both Brooke Corp. and Brooke Capital Corp. had been publicly traded on Nasdaq and the American Stock Exchange until trading on both stocks was halted.

That SEC filing indicated that bankruptcy court had approved joint administration of both companies, with Reiderer as the trustee.

Brooke Corp. listed assets of $512.9 million and liabilities of $447.4 million. Brooke Capital Corp. listed assets of $106.2 million and total debts of $111.7 million.

The bankruptcy petition did not include Generations Bank, a $130 million thrift that was told late last week to either find a merger partner or sell the bank by Dec. 15.

The bankruptcy petition also did not include Aleritas Capital, a finance company that specializes in insurance-related lending.