Editor’s note: MassLive is a tenant of Venture X in the Mercantile Center building.
The president of a company that lists the Mercantile Center in downtown Worcester as one of its properties has filed for Chapter 7 bankruptcy, according to court documents.
Charles “Chip” Norton filed a Chapter 7 bankruptcy petition for individuals with the U.S. Bankruptcy Court for the District of Massachusetts on June 23.
The Mercantile buildings, located at 100 and 120 Front St., are used by more than 1,500 people, according to the Mercantile Center website. Notable tenants in the buildings include Kelleher & Sadowsky Associates, the Worcester District Registry of Deeds, the Telegram & Gazette and MassLive.
Chapter 7 bankruptcy is when an individual appointed by a court to oversee a bankruptcy case gathers and sells the nonexempt assets of a person who owes money and uses the proceeds to pay creditors, according to the U.S. Courts’ website.
According to court documents, Norton lists more than 150 people and entities to whom he owes money. These creditors include Country Bank, Webster Five Bank, MassDevelopment and Franklin Realty Advisors. Norton owes more than $1.7 million, according to the documents.
However, filings by two creditors suggest Norton owes them a combined $70 million.
The Ware-based Country Bank submitted a proof of claim in court for $67 million that was loaned for obligations connected with Norton’s Front Street properties.
A proof of claim is a formal statement filed by a creditor that states the amount of money the debtor owes.
The Worcester-based Cornerstone Bank also filed a proof of claim in court for $1.67 million connected with money loaned to Norton.
A spokesperson for Norton sent a statement on his behalf on Wednesday, reading that it was “fulfilling” to play a role in growing Worcester and Worcester County.
However, the statement did not address Norton’s bankruptcy proceedings.
“We’re immensely proud of the times we opened our doors to our communities, the ribbons we cut welcoming new businesses to the region, and the large investments we’ve made across Central Massachusetts and in our downtown areas in excess of $200 million,” the statement reads. “We will continue to celebrate the region’s bright future.”
Reached Tuesday, an attorney for Norton also declined to comment about the bankruptcy filing.
Franklin Realty Advisors did not respond to multiple requests for comment this week.
Additionally, Cornerstone Bank filed a lawsuit in Worcester Superior Court against Norton on May 9. The lawsuit claims that Norton failed to make payments on a loan worth more than $1.6 million, along with a personal guaranty agreement, according to the lawsuit.
The lawsuit also claims that Norton sold properties in Dover and Falmouth at a price much lower than their market value and transferred them to his wife.
“Mr. Norton’s transfers of his interest in the Dover Property and Falmouth Property were made with actual intent to hinder, delay, or defraud his creditors, including the Bank,” the lawsuit reads.
An employee from Cornerstone Bank declined to comment on Tuesday.
Cornerstone Bank’s lawsuit is one of at least five that Norton faces, court documents reveal.
The United States Bankruptcy Code allows a person who has filed for Chapter 7 to keep certain property they deem exempt from bankruptcy but a trustee will liquidate that person’s remaining assets, according to the U.S. Courts’ website.
Examples of possessions that can be sold are luxury items such as jewelry or secondary vacation homes.
According to court documents, Norton has made multiple payments over $5,000 to Ferrari Financial, the Ferrari car company’s financing firm.
He has also purchased gifts for multiple people, including a Swiss Air ticket worth more than $4,000 and a Toyota Land Cruiser worth $11,000.
Unclear relationships
Norton is listed as the president and owner of Franklin Realty Advisors, a Wellesley-based firm that, according to its website, owns the Mercantile Center and several other buildings, including The Worcester Business Center and the Southbridge Innovation Center.
However, there is conflicting information as to Norton’s connection with Franklin Realty Advisors, and over the company’s relationship to the buildings.
A lawsuit filed in Worcester Superior Court against Norton by the Worcester-based Lauring Construction Co. Inc., reads that the construction company learned Norton stepped away from his duties sometime in the Spring.
Although the lawsuit suggests that Norton stepped down, his LinkedIn profile still lists him as the president of Franklin Realty Advisors. The Massachusetts Secretary of the Commonwealth Website also lists Norton as the manager of the company.
A spokesperson declined to comment about Norton’s current status and whether Franklin Realty Advisors still owns the buildings.
Lauring Construction did not immediately respond to a request for comment this week.
The Mercantile Center Buildings are currently being managed by Eastport Real Estate, a Wakefield-based company, an employee from the Eastport told MassLive on Wednesday.
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