Claims against bankrupt agency top $3 million

Date: 2009-07-30

By Brian Caldwell,

CAMBRIDGE – Families burned by the bankruptcy of a Cambridge adoption agency have filed claims that will likely top $3 million.

That is several times the amount first estimated after Kids Link International Adoption Agency – which operated as Imagine Adoption – collapsed July 14, leaving more than 400 clients across Canada in limbo.

Most families hoping to adopt needy children from overseas, however, had received some services from Imagine. That would reduce their potential payouts if the agency can’t be saved.

Home studies already done by social workers, for instance, have value and could be taken to other adoption agencies.

“We know it’s probably not going to stay that high, but that’s what they filed,” said Susan Taves, the bankruptcy trustee for BDO Dunwoody.

An up-to-date tally of claims will be available Thursday at a meeting of creditors in Kitchener.

A preliminary report by BDO released Wednesday shows Imagine had just $500,000 in cash, plus about $150,000 in accounts receivable and office equipment, when it went bust.

The collapse affected about 415 families. Government officials are working to complete adoptions for about 40 clients who had already been matched with children. The remaining 375 are at various stages of the lengthy process.

Two directors of Imagine began scrutinizing its finances after learning senior staff members had six-figure salaries and suspect expenses.

Susan Hayhow, the executive director, earned $180,000 a year. Her now-estranged husband, Rick Hayhow, made $140,000. Both also had the use of expensive vehicles.

A board member estimated the questionable credit card expenses – including trips, home renovations and the purchase of a horse – at more than $300,000 since early 2007.

Taves said bankruptcy trustees will pursue the couple for repayment of the expenses – now the subject of a fraud investigation by police – if they weren’t legitimate.

“Will we get it? I don’t know,” Taves said. “But if people use money that they’re supposed to repay, we’re going to ask for it back – absolutely.”

At a meeting just before the bankruptcy, she said, Susan Hayhow asked for a list of the suspect expenses and indicated she would consider paying them back.

Claims from about 300 families – who typically paid $13,000 to $14,000 in fees to Imagine – had come in by Wednesday evening.

Also caught up in the bankruptcy are two related organizations headed by Susan Hayhow – Global Reach Children’s Fund and Saint Anne Adoption Agency – because money was moving among all three organizations.

Taves said it also appears that money to be held in trust for clients was regularly mixed with other funds.

Despite fraud allegations and the agency’s grim financial picture, Taves said there is encouraging news for families hoping to have adoptions completed.

About six people with the required expertise have stepped forward and may be able to take over the agency with approval from the province.

“Those are real conversations that have been going on for the last two weeks,” Taves said. “That is very much alive as a possibility, which is great.”

Susan Hayhow broke up with her husband this spring and is in a common-law relationship with Andrew Morrow, a director of Imagine and a staff member of Global Reach. Morrow’s estranged wife, Teresa, also worked at the agency.

Taves said Susan Hayhow and Andrew Morrow are back in Canada after going to Ethiopia just before the bankruptcy, but they aren’t required and aren’t expected to attend the meeting of creditors.


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