Wow Alex, that’s terrible. I agree, it sounds like ISG may be in financial trouble.
Did you pay ISG the tuition fee of $3500 with a credit card? If so, you should be able to contest the charge with your Credit Card company, since ISG failed to deliver the services for the money paid. You could also take them to small claims court, though if they’ve squandered their money it may be tough to get them to pay (though the courts could help).
Some service companies charge fees in advance, and maintain the right to cancel a class if attendance doesn’t turn out to be enough to make it profitable. However, if it’s their choice to cancel, then they really reimburse their students.
Best of luck getting this resolved, and let me know how it goes. I’m still a big fan of the Court of Master Sommeliers as a superb way to earn your accreditation, though you would have to travel to attend some of the courses.
Another option is to check out the courses taught by David Glancy MS and crew at San Francisco Wine School — they have some good courses of varying lengths, many taught by Master Sommeliers like David. I think some can be attended remotely.