PORT ANGELES — Citing just more than $595,000 in unpaid taxes, wages and refunds owed to adoptive families, Port Angeles-based nonprofit Adoption Advocates International has filed for Chapter 7 bankruptcy protection.
“There was just too much,” Adoption Advocates Board President Suzanne Hayden said Wednesday.
The nonprofit, which has placed 4,500 orphaned or adopted children from around the world and in the state, closed its doors March 10 after 30 years of operation.
Hayden said the nonprofit’s board voted March 10 to close the agency’s office at 709 S. Peabody St. and declare Chapter 7 bankruptcy, in which an agency or business completely shuts down and begins the process of liquidating all its assets.
Hayden, who came on as board president last fall, said the decision to file for bankruptcy came after years of financial troubles following the 2011 retirement of Merrily Ripley as executive director.
Ripley founded the nonprofit in 1983.
The voluntary petition for bankruptcy filed in the Western District U.S. Bankruptcy Court in Seattle on Friday, March 21, lists Adoption Advocates as having $459,445 in assets and $595,617 in liabilities.
According to the petition, the largest single claim held against the agency is $204,970 by U.S. Bank, which Hayden said holds the mortgage on the agency’s office.
John Peterson, a Kingston-based attorney acting as the trustee for the Adoption Advocates bankruptcy, said Wednesday he was just beginning the process of reaching out to those listed in the petition as having claims against the agency.
“I can’t say at this point who will get paid and who will not get paid. It’s way too early for that,” Peterson said.
In the coming weeks, Peterson said the 106 creditors listed in the petition will receive notices that they have potential claims against Adoption Advocates.
“That’s part of a long process of getting all this stuff taken care of,” Peterson said.
The petition lists as claims $21,785 in wages owed to attorneys and Adoption Advocate’s eight employees, which included Port Angeles City Councilman Brad Collins until the May 10 closure.
Collins came on as interim executive director in October.
In the months leading to the decision to declare bankruptcy, Hayden said staff were working without pay to try to raise funds, finalized as many adoptions as possible and sent refunds to families where it was appropriate.
The petition also lists dozens of families who had been working with Adoption Advocates to adopt children, with individual amounts owed to the families for services not yet given reaching a maximum of $7,000.
The bankruptcy filing comes as a Clallam County Sheriff’s Office investigation into a complaint against Adoption Advocates regarding $7,000 a church in Colorado paid the nonprofit has been closed.
“This is not a criminal matter. It is a civil matter to be handled through bankruptcy court,” Detective Tom Reyes, with the Sheriff’s Office, said Wednesday.
“This is just an very unfortunate situation,” Reyes added.
C.J. Aldteron, pastor of Patrick Crossing Ministries in Durango, Colo., filed the complaint earlier this month when he learned Adoption Advocates intended to declare bankruptcy.
Alderton’s congregation raised the $7,000 paid to the nonprofit as one of the final steps in helping a couple in the church adopt a 5-year-old boy from Uganda.
Alderton said Wednesday his church does not indent to take any legal action against Adoption Advocates concerning the $7,000.
“There’s no bitterness. It’s all forgiveness on our end,” Alderton said.
Hayden said Patrick Crossing’s check was cashed just days before the board made a final decisions to close.
At that time, the board was still struggling to maintain business as usual and hoping to remain open, Hayden explained, so the payment was seen as a normal course of business.
That was until the state Department of Revenue placed a hold on the agency’s bank account, preventing any more payments from being made, Hayden said.
The agency had been making monthly payments on back state business and operation taxes starting in tax year 2007, Hayden said.
Given the circumstances surrounding the Patrick Crossing payment, Hayden said she plans to reach out to Port Angeles churches as an individual to try to raise the money needed for the Durango, Colo., family to move forward with their adoption through another agency.
“We’re talking about a little boy who’s waiting,” Hayden said.
“These people have his picture in his hands. We’re just trying to get him home.”
The nonprofit, which celebrated its 30th anniversary in October, places children — from babies to teenagers — from Ethiopia, Burkina Faso, China, Thailand and many other countries, including foster children from the U.S.
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Reporter Jeremy Schwartz can be reached at 360-452-2345, ext. 5074, or at jschwartz@peninsuladailynews.com.
