A lawsuit alleging fraud and civil racketeering against Brooke Corp. and subsidiary Aleritas Capital Corp. has been dismissed by a federal judge in Kansas, court records show.

A group representing 75 former Brooke (OTC: BXXXQ.PK) agencies charged that Brooke, other subsidiaries and Aleritas, which "provided loans to essentially 100%" of Brooke franchisees, overstated the value of the agencies and charged very high fees -? as much as half of total commissions -? for a variety of services and support activities that were never delivered (BestWire, April 10, 2009).

U.S. District Court Judge Carlos Murguia ruled the plaintiffs' claims were not specific enough to file suit against Brooke, which had been one of the fastest-growing insurance franchisers, with more than 900 agencies across the United States. Brooke Corp. and a subsidiary filed for Chapter 11 bankruptcy protection last October (BestWire, Oct. 29, 2008). A special master has been appointed to oversee the bankruptcy.

According to court records, several banks, including the Bank of New York Mellon, have also filed suit against Brooke.

Brooke is under federal investigation, and agents from the Federal Bureau of Investigation seized company files last December. It is also being investigated by the Missouri Department of Insurance (BestWire, Dec. 17, 2008). An effort to sell the corporation's insurance operations fell through last November (BestWire, Nov. 4, 2008).