Families face new challenges after adoption center bankruptcy

DEKALB COUNTY, Ga. — Channel 2 Action News has learned that the trustee hired by the agency that handled hundreds of local adoptions is now set to sue the nonprofit's board of directors for its failure to properly handle the bankruptcy case and the money she's spent working on the case for the last two months.

Her complaint was filed just a week after she contacted local families via mail to assist with their claims against the embattled nonprofit.

Channel 2 first reported on the Independent Adoption Center's sudden closure in January.

The California-based agency operated offices in several states, including one in Tucker. Without warning, nearly 1,900 families nationwide who were in the middle of IAC adoptions had to move forward without newborns. They were promised matches with birth mothers. The IAC later notified them via email that a shortage of mothers led to the bankruptcy.

“Either these guys were terrible financial managers and violated their responsibilities, or there’s malfeasance going on and somebody has stolen money,” said Dr. William Wilcox, a former Atlanta IAC client.

GEORGIA FAMILIES LEFT OUT OF AMENDED BANKRUPTCY

Channel 2’s Nicole Carr pulled several years’ worth of tax returns for the agency , revealing a thriving multimillion-dollar operation that began to falter about two years ago.

Wilcox said he and his wife were like all the other families who invested tens of thousands of dollars into the IAC adoption process, including family advertising packages last year to boost their chances of finding a match.

Wilcox said he recently learned that Georgia families were exempt from an amended IAC bankruptcy filing. In other words, they have no legal recourse to file claims against the agency in the case. The trustee’s attorneys replied to Wilcox’s email, saying that another nonprofit was handling the local families.

TRENDING STORIES:

“The trustee on this complaint said there’s a separate nonprofit set up in Georgia which none of us can find out anything about,” said Wilcox.

Carr contacted the attorneys via email, but did not receive a response. A former IAC spokesperson was unable to provide information about the nonprofit cited in the trustee’s attorney’s email. None of the Georgia state agencies involved in this case had any information, either.

THE COMPLAINT

Attorneys for Marlene Weinstein filed a complaint March 21 against the IAC’s eight-member board of directors and its insurance company. It was filed in the U.S. Bankruptcy Court’s Northern District of California, Oakland Division.

The complaint describes a messy bankruptcy case handed to Weinstein by the IAC board. Weinstein alleges that much of what Channel 2 reported via records and client accounts. It said the IAC was "losing money every month" and shut down "without giving government regulators advance notice" about confidential records. It also said the IAC was continuing to "operate with insufficient assets" even when "there was no turnaround in sight."

Weinstein is asking the trial courts to determine how much compensation she should receive for the IAC’s failure to pay her for her services and the expenses she incurred in handling the bankruptcy case that was given to her on Feb. 3, 2017.

LOOKING FOR HELP

Wilcox and his wife filed a complaint with the Georgia Department of Law almost immediately after the IAC closure. Wilcox received a letter in late February from the state’s Consumer Protection Unit, essentially saying that it could not provide assistance in the case because of its unique legal circumstances. The letter suggested that he seek an attorney to settle the matter with the IAC.

“So what’s going on with us and why doesn’t our state give a damn?” asked Wilcox.

Carr contacted the state attorney general's office to see if there was any legal recourse for Georgia's IAC families, considering the latest court filing. A spokeswoman said she would look deeper into the case, and provide information as soon as possible.

Carr also contacted the California AG’s office to inquire about any potential criminal investigation into the IAC. In a statement, the press office said: "We can't confirm or deny any potential or ongoing investigation to protect the integrity of any investigation."

Wilcox and his wife said they don’t know what’s next for them.

“I don’t know if there are any options for us realistically, and I’m not getting any younger or have forever to wait,” said Wilcox. “We may just be out of luck.”