HOUSTON – For 34 years, the Independent Adoption Center matched children with adoptive parents to create families, as the center’s promotional video shows.
But on Jan. 31, the center abruptly closed its Houston office, along with offices in seven other states.
Three days later, it filed for Chapter 7 bankruptcy in California, citing changing demographics and closure of international adoption programs.
Its statement said in part:
“We have striven to find financial solutions, we have come to the end of a rope and are declaring bankruptcy.”
“I would have liked an email, a phone call. We never received any of that," potential adoptive parent Isabel Reyna said.
Reyna and her husband, Dorian, learned about the closure from the company’s website.
The Reynas run a small automotive business together.
They’ve spent more than a year, and about $12,000, working to adopt a baby through the center.
Now Isabel says they’ll have to start over with a different agency.
“I was in shock. Just a few days prior to that I got in touch with my adoption coordinator,” she said. “I don’t know what to say. All I can say is that everything is going to be OK to her."
The center’s closure affects more than 1,800 adoptions that were in progress nationwide.
As far as recouping any money, those clients, like the Reynas, are now unsecured creditors in the bankruptcy case.
That means they are at the end of the line to receive a share of whatever assets IAC may have left.
Attorney Melanie Gray is a well-known Houston attorney specializing in bankruptcy law.
“They might receive some distribution, but generally in Chapter 7 cases, distributions to unsecured creditors are small, if anything,” Gray said.
And to be eligible for that, Gray says former clients will need to file what’s called a proof of claim with the bankruptcy court California.